I’ve also ran into this issue.
The WPDM login form *is* logging the user in, but is not redirecting them because it’s not applying the shortcode parameters.
What I’ve found is if my “Login” page with the shortcode is selected on in Settings > FrontEnd access, it only places in a basic login form without my logo & redirect parameters. If I un-select where the Login page is in the FrontEnd settings, the login page shortcode applies all the correct settings BUT all of the natural login links within the WPDM shortcode (i.e. archive page) go to the standard WP login page.