Neither of the 2 options (even together) seem to work on the new Windows 7 system: Tools/Settings/Files/Set Default and/or Open/Change default folder.
I don't recognize the first item, but I only have WPX4, WPX5, and WPX6 on my Win7/64bit home premium system.
Do you mean Tools/Settings/Files/Document tab/"Default document folder:"?
As for your other question: I don't believe Win7 disables any feature in WP, but since you are using WP10 with an operating system that is quite differently structured than Windows XP ... I'm surprised it works well enough to be useable. ;-)