Reported for: WPML Multilingual CMS 18.104.22.168
Resolved in: 3.2
When enabling “Use directory for default language” and selecting “HTML file” for “What to show for the root url” the HTML file is ignored.
Select the second option and create a “normal” root page.
After doing this, switch back and try again to set the static HTML file.
It should work the second time around.