For some reason, on the blur effect is is always disabled for me on logon. I tested with the AMD integrated graphics and also the Nvidia discrete GPU, with the same result.
After login, if I toggled it off then on, it worked. So I made a small script to do just that on login:
#!/usr/bin/env bash
sleep 10
qdbus org.kde.KWin /Effects toggleEffect blur
Hope this helps someone else.