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Configuration variable MS_DWGSAVEAPPLICATIONDATA= 1 does not seems towork for MicroStation XM version.
This is related with another configuration variableMS_DWG_LEVELDISP_FOR_VPORTFREEZE.
On XM you can workaround it by settingMS_DWG_LEVELDISP_FOR_VPORTFREEZE=OFF, only IF the user does not need thesetting for MS_DWG_LEVELDISP_FOR_VPORTFREEZE.Otherwise User has to upgrade to a newer version of MicroStation wherethis bug has been fixed.
http://communities.bentley.com/products/microstation/w/microstation__wiki/4176.microstation-v8i-variables.aspx