In general, I would like to know why someone removed the options button for configuring screensavers.  To satisfy that GNOME disdain of giving the user unnecessary options, you should omit the screensaver control panel by default, but if the user installs it, it should have the configure button.  Screensavers are frivolous, so if someone is going to choose from dozens, they should also be able to configure it, especially since some look radically different with different settings.  For example, Polytopes can be configured to display hypercubes, hyperballs, etc., and GLPlanet can show Mars (or anything) instead of Earth.

Adding configuration options is a separate issue and deserves opening a separate bug report which would be fair to classify as "Normal enhancement". As for this particular bug, it should be reclassified as high priority, and normal to major severity, cause it prevents normal usage of XDG_PICTURES_DIR as private storage of pictures not necessarily intended for any specific use (random slideshow in this case). I personally think that switching to XDG_PUBLICSHARE_DIR would do, since it's already there, but some special folder also can be created, as suggested in Bug 616242 (which is technically a duplicate).

Thanks for taking the time to report this bug.
However, you are using a version that is too old and not supported anymore. GNOME developers are no longer working on that version, so unfortunately there will not be any bug fixes for the version that you use.

By upgrading to a newer version of GNOME you could receive bug fixes and new functionality. You may need to upgrade your Linux distribution to obtain a newer version of GNOME.
Please feel free to reopen this bug if the problem still occurs with a newer version of GNOME.