I believe the wizard is broken, it's not your misinterpretation. See invent.kde.org/education/kstars/-/issues/173
We recently upgraded our DSO storage and retrieval code to work well with the space-partitioning data structure we use. This enables us to do a lot of other cool things (like enable a database of 1 million galaxies), but I suspect it has broken many things; I imagine this is one of the things that's not working because of this change. Please add your feedback to the issue linked above so we can make sure to take it into account when we fix it.

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