With the USB unpluged the timeout works as expected. However, if you plug in a USB power the LCD timeout is 10 seconds, regardless of the settings.
I was using USB power, not connected to a computer. I know that is not really supported yet, but at least it maintains the battery. Plugging into the computer causes Rockbox to reboot. No idea if that is expected or not.
The wheel timeout is not affected.
Sansa E250
r18607-3.0-080923