The FFS manual page you link to yourself states:
Files and folders are only considered for synchronization if they pass all filter rules: They have to match at least one entry in the include list and none of the entries in the exclude list ...
You have excluded
\Desktop\ (and thus
everything in it), so also all
*.txt files in
\Desktop\, so it is not strange you see no *.txt files to be synced.
Your post is confusing, because the Compare results picture you show, are not/can not be the Compare results when using the Include/Exclude rules as per the picture you show.
Your description is also confusing. Your picture shows TWO left-right folder pairs, but if you really are
"trying to mirror *only* the text files I've on my Desktop folder (excluding all subfolders):",
you can Include
\Desktop\*.txt (which would include all *.txt files in \Desktop\ and its subdirectories), and then Exclude
\Desktop\*\ (which excludes all subdirectories of \Desktop\).
But because of your conflicting pictures, and inconsistency between your description and any of your pictures, your exact intentions are not clear.