Just found out that its not a bug and the quest 3 needs you to manually set permissions so that DEO has access to storage before allowing DEO to enter this menu item. It makes sense, but nothing is mentioned during the Quest 3s auto install of your existing apps onto the new device. It doesn't set (or even ask to set) the permission for any of your legacy apps. If you notice an app not behaving properly, this is the place to check first.
DEO VR works correctly once permissions are set properly. Just a heads up to others.