Not sure which config file you are referring to but at least gmlink_connections.json shows the correct path? I am not using a onedrive folder.It doesn't show the name of the slice that I was updating though.
I was able to get 1 sprite to be added but that was only after I exited Gamemaker and told it not to save changes. I tried updating that same sprite via GMLink and then the sprite image changed to the one below. I try to edit the sprite file via GameMaker and it said the file is not found.