Comment # 4 on bug 1208268 from Stefan Dirsch

Looks like xdm prefers (via /etc/X11/xinit/xinitrc.common) plasma*.desktop over
icewm*.desktop over default.desktop (*.desktop), if $WINDOWMANAGER isn't set.
So in theory it should try to start the command in the Exec line of
plasma5.desktop, which would be

  /usr/bin/startplasma-x11

Not sure why it would ever try to use the command of the Exec line of
default.desktop, which I guess would be /usr/bin/startice.  But on
icewm of Leap 15.4 it seems to be /usr/bin/icewm-session. Now I'm confused. I
can't find a startice command on my system.

Whatever I suggest to try this icewm command as well in your simple xterm.