Assuming you are referring to the Folder View Widget, the easiest way to have full-featured application links in a Folder View is to copy-paste existing applications'
.desktop files into it. By default they are installed in
As the name implies, a Folder View is a way to show the content of a directory on the Desktop or in a Panel. By right-clicking on a Folder View you can "Configure Folder View" to, among other things, choose the directory whose content it is showing or "Open with Dophin" to have that directory opened in the default file manager.
You will then see that each icon shown in the Folder View corresponds to a
.desktop file (i.e. a Desktop Entry). As far as I can tell, Plasma doesn't offer a GUI tool to fully customize a desktop entry—this is why copy-pasting an existing one is more convenient than creating a new one (as you did with "Create New" → "Link to Application"). You can, however, edit a desktop entry using a text editor. The displayed icon can be set by adding/editing the
Icon key and making it point to an absolute path (e.g.
Icon=/path/to/myicon.png) or to a name (e.g.
Icon=firefox), which will be resolved using the algorithm explained in freedesktop.org's Icon Themes specification.