Hmm, i wouldn't really call this a solution. If I want to permanently hide the desktop icons, and use the "double-click to show icons" feature of fences, then this is impossible with Deskscapes. The icons will be hidden with fences, but Deskscapes will force them to show (minus the actual fences around the icons). Double-clicking the desktop will just show and hide the fences and the icons themselves will be visible the whole time. The I figured out the settings above were the only combination to hide the desktop icons but changes the "show" action to mouseover rather than double-click which isn't what I want (personally).
Does Stardock even support Deskscapes anymore? They sell the software, and even bundle it with fences in a recent humble bundle even though it's not fully compatible, but haven't updated it for many years, and good luck creating new hybrid/dynamic dreams. The SDK that's required for that has disappeared from their website, and the dream creator tool has been flagged as incompatible with windows 10, rendering it unopenable unless you rename the file.