Launcher 'Application in Terminal' uses mate-terminal

I do not get the problem you are solving.

But I think that we can set default terminal application for MATE in Preferred Applications ( mate-default-applications-properties), System tab, Terminal Emulator section:

mate-default-applications-properties

(but it will not work for launchers with Terminal=true in older UM versions)

Or system wide by using

sudo update-alternatives --config x-terminal-emulator