It's not a commonly known feature..
then what's the file name associated with Paste-As-File used for?
Let me clarify. This feature is for pasting the clip contents (text or image) as a newly created file, with the filename specified.
Therefore, it is only useful when "pasting" into a File Explorer program, or on the desktop (though it's possible that desktop pasting doesn't work on all versions of windows?).
When you do a "paste as file" -- a new file should be created with the filename you have specified.
If pasting to the desktop is not working, maybe try pasting inside Windows File Explorer or whatever third party file explorer you use.
Make sure you are in a window where you can create a new file (and have persmission to do so). And try triggering the paste-as-file function from the quick pop-up menu.