Embed images not working on Windows

Steps to reproduce:

• open Inkscape
• Import an image and Link it (gp_image_01, taken from https://bugs.launchpad.net/inkscape/+bug/1163701)
• Extensions > Image > Embed images
• make sure embed selected is unchecked (or image is selected) and hit apply

What happened?

• Extension fails, with File not found "C:\Downloads\gp_image_01.png" Unable to embed image (note missing Users\Username)
• In the above case, happened with image in Downloads folder, with Inkscape extracted to a folder in the Downloads folder.

What should have happened?

• extension succeeded

Version info

• Inkscape 1.2-dev 3495c164 2022-01-17 Windows 11, also tried with latest extensions, which should be at 85ff595b567b10fa8502c932b5c10a74b0982513
• Also happens in the 1.1.1 release

Seems to work in 1.0.2 release (which is installed in a separate directory though), but not in 1.2-dev moved to a similar location