When creating a new Dolphin service menu to create a new text file using Kate (given there is no shortcut for that like for folders and that the menu option is rather hidden under multiple clicks as said here), using a desktop file like this
[Desktop Entry]
Type=Service
Icon=kate
Actions=new-file
ServiceTypes=KonqPopupMenu/Plugin,inode/directory
X-KDE-Priority=TopLevel
[Desktop Action new-file]
Name=New text file
Icon=kate
Exec=kate %u
Kate creates the file not within the selected directory, but at the same path as that directory, one level up than expected: selecting folder /PATH/TO/MY_DIRECTORY and using the context menu service, the text file is ready to be saved at /PATH/TO instead of /PATH/TO/MY_DIRECTORY.
The same happens with Exec=kate -n new.txt %u, as the file is created and saved.
How to make Kate save or offer to save within the selected directory?
How to do it inside the selected folder?