Errata: I'd forgotten to set the window management to "Compton".
I can now fully reproduce the problem on 17.04 Beta 2 (fully updated)

Complete PM settings:

ON AC:
 Put computer to sleep when inactive for: Never
 When laptop lid is closed: Do nothing
 Display:

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https://bugs.launchpad.net/bugs/1599331

Title:
  mate-screensaver won't start when using Marco + Compton

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