To create an ISO, select Image File in the "Burner" box... 
Check the "use bookmarks as chapters" box.
Under ADD MENU, if Basic Play is chosen, there will be a single PLAY button, no clickable chapters.
If Basic (List) is selected, then the Navigation | Title or Root menus have clickable chapters. Here, they respond individually where the bookmarks were set.
When play finishes, the Main menu reappears. Clicking it brings up the chapter display, as shown above.
The only issue is audio noise at the head of clip 1 (of 3). That bug has been reported.