After starting X/fvwm2, the desktop fails to scroll/switch when the mouse is moved to an edge. One has to manually switch desktops using the pager. From this point on, automatic scrolling/switching works.
I have verified this bug to be true. When you first start fvwm you cannot scroll with mouse from one virtual screen to another until you click a different window in the pager module. It then scrolls from one screen to another properly.
That is just the way fvwm2 appears to be working, and from looking in the source this behavior looks to be intentional. Dunno why.