Yes, with 1.2.5 everything worked fine for me. No config file or parameter have been changed on my part.
Looking at the code of bisq.common.config.Config @245
I assume the default config file path at ~/.local/share/Bisq/bisq.properties stored in the var defaultConfigFile should be read.
However the variable defaultConfigFile is never read again and then at line 630 it tries to create the parent directory what will throw the new ConfigException(ex, "Application data directory '%s' could not be created", path);
However I didn’t compiled and debug the code. I just skimmed over it…