servicemenuinstallation ruby script has line:

$servicedir = `kde4-config --localprefix`.strip! + "share/kde4/services/ServiceMenus/"

servicemenudeinstallation ruby script has line:

FileUtils.rm(`kde4-config --localprefix`.strip! + "share/kde4/services/ServiceMenus/" + File.basename(archive))

Test - execute:

$ servicemenuinstallation test.desktop

Result:

/usr/bin/servicemenuinstallation:43: warning: key "application/x-gtar" is duplicated and overwritten on line 50
Single-File Service-Menu
test.desktop
/home/USER/.kde4/share/kde4/services/ServiceMenus/

=> The test.desktop is installed to the wrong place and the Dolphin 16.08.2 can't see it.

With the KDE Frameworks 5 the service paths are: 'kf5-config --path services' so the lines could be:

$servicedir = `kf5-config --path services`.split(':').first + "ServiceMenus/"

FileUtils.rm(`kf5-config --path services`.split(':').first + "ServiceMenus/" + File.basename(archive))

Making the changes - Testing - executing:

$ servicemenuinstallation test.desktop
/usr/bin/servicemenuinstallation:43: warning: key "application/x-gtar" is duplicated and overwritten on line 50
Single-File Service-Menu
test.desktop
/home/USER/.local/share/kservices5/ServiceMenus/

and the 

$ servicemenudeinstallation test.desktop

Will remove the test.desktop from /home/USER/.local/share/kservices5/ServiceMenus/