As requested, I have filed the bug on the Xfce gitlab with the same info as posted here.

https://gitlab.xfce.org/xfce/xfdesktop/-/issues/438

Regarding the VNC "virtual monitor", when I was investigating TigerVNC server, there's a "standalone" mode where the server creates a completely virtual desktop that can only be accessed over VNC. That might be what you're thinking of. But the VNC mode that I'm using is what TigerVNC calls "scraping", which is to copy images from the existing X server and transmit them to the client, thus showing to a remote client what you're seeing on a real monitor.

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