I selected
Permission type: Scoped App (App Folder)
App folder name: Name_of_App_Folder
and created an app.
According to this https://www.dropbox.com/developers/reference/developer-guide
"App folder
A dedicated folder named after your app is created within the Apps folder of a user's Dropbox."
Neither of these folders (Apps or Apps/Name_of_App_Folder) was created.
Just discovered an additional bug.
When trying to add the label "Bug" in the Labels field below, I get "The following labels are not available here: Bug"