It should be an instant setting, no restart required.
First restart your PC and see if it then works.
Thanks, gener7. We have tried that. We are also running the latest updated version from Adobe Cloud. We have checked and unchecked the box in Preferences, restarted, and reinstalled several times, but Photoshop always defaults to the last folder used (instead of the folder where the current file was opened from). So frustrating!
Any other ideas?? Thanks!
Ok, so I have a little more information:
The “Save As to Original Folder” preference seems to behave normally when we open PSD files, but at our business we work almost exclusively with PDFs. We open PDFs into Photoshop (which pops up Photoshop's "Import PDF" dialog box with the "Page Options" and "Image Size" collections of options), and then we Save As... filetype "Photoshop PDF". I think the import step must be where the “Save As to Original Folder” parameter is getting lost.
This bug seems like an oversight on the developers' part, so maybe this is more of a development feature request issue?