For some reason when applying the custom theme the registry value UserPreferencesMask"=hex:9e,3e,07,80" @ [HKEY_CURRENT_USER\Control Panel\Desktop] changes to UserPreferencesMask"=hex:9e,3e,05,80", causing the problem.
The problem can be resolved by changing the registry value back manually or with a .reg file, however can this registry change somehow be added/prevented to/from within the .theme file itself (so I will not have to run a .reg file every time I change themes)?