Thanks for the clear repro and workaround.
This looks like a real desktop bug, and it is not GitLab-specific. The same path would skip the clone for GitHub, Bitbucket, Forgejo, Azure DevOps, or a pasted Git URL.
What happens
On the clone destination step, in-app folder selection plus Clone / Enter calls submitAddProjectCloneFlow, which starts the clone (and creates the project as part of that). Open in Finder uses a different handler that only adds the chosen folder as a project (createWorkspaceRootIfMissing: true) and never starts cloneRepository / startProjectClone.
That matches what you saw: the project appears, the repo is not cloned. The Finder dialog itself is fine; the picked path is just consumed as “add project” instead of “clone here.”
Relevant code:
apps/web/src/components/CommandPalette.tsx—handleOpenProjectFromFileManageralways adds; clone submit is only on Enter and the Clone buttonpackages/client-runtime/src/operations/projects.ts— in-app browse pins the destination as<chosen folder>/<repo>
Workaround (as you found): delete the empty project and choose the destination with the in-app picker, then Clone/Enter.
Fix direction: when the palette is on the clone confirm step, Finder Open should resolve the picked folder the same way in-app browse does (getCloneDestinationBrowsePath / getCloneDestinationPath, so a folder already named after the repo does not become repo/repo) and then call submitAddProjectCloneFlow. The WSL UNC branch of that handler needs the same treatment.
Accepting this. No logs needed unless a fix still fails after that change.