bash script runs fine except when run as nautilus script

I have bash script below to AI upscale a bunch of images and then re encode them to reduce file size, it works fine if I call the script from the terminal but not when I select it in nautilus as a nautilus script.

I have put the script in the nautilus scripts folder and it appears in the menu, the script runs but the part that re encodes the images does not work and I don't know why because there is no debugging output for scripts called from nautilus.

Maybe there are some environment variables that do not work if launched from nautilus, thats all I can think of.

#!/bin/sh
PS4='$LINENO: '
OIFS="$IFS"
IFS=$'\n'
set -x
for arg
do
    mkdir "${arg}US"
    /Programs/realesrgan-ncnn-vulkan -i "$arg" -o "${arg}US" -n realesrgan-x4plus -s 4 -f jpg
    rm -rf "$arg"
    cd "${arg}US"
    DIR="${arg}US/*"
    for picture in $DIR
    do
    nice -19 /usr/bin/cjpeg -quality 85 "$picture" > "${picture%.*}RC.jpg"
    rm "$picture"
    done
done
IFS="$OIFS"