"The proposal includes building resorts with private beaches... and a dumping ground for nuclear waste."
Yeah that checks out. I remember driving past that huge green park in Riyadh covered in white dust because it was built right next to a gigantic concrete factory.
The island was constructed artificially. Most maps don't draw international borders in water, but I've seen some maps with the border drawn to the west of the island (placing in the territorial waters of Bahrain), and some maps that bisect the island.
There is nothing of value on the island aside from a few fast food restaurants. With the close ties between the AlSaud and Khalifa families I'm sure it's not a point of contention. There might be something official but with Arab culture being what it is I think it's just as likely that there is an unofficial gentlemen's agreement to share the island.
Whether or not the island is fully within the territory of Bahrain or not, it certainly feels like a legitimate international border, so if nothing else maybe it could be said the Saudis are "leasing" their side.
Maybe a truly new one will be a tunnel between Finland and Estonia? It has been discussed for about a decade. Another one, as you mentioned, is a link between Spain and Morocco.
Apart from that... hmmm.... There are some Carribean islands that could be connected (as well as Trinidad with Venezuela) but I assume that there's too few inhabitants and too little cash for something like that.