To confirm, this behavior is also happening on my system too. Ubuntu 16.10
When I open Dropbox from the indicator panel, all desktop icons disappear. 
Cannot be brought back unless I log out and log back in.
Does not happen if I open dropbox folder from Nautilus (file manager) directly.

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https://bugs.launchpad.net/bugs/1633826

Title:
  nautilus desktop crashes when called with --no-desktop

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