µTorrent 3.1 (26616) default download location not working

I'm having problems with the default download location functionality in version 3.1 (26616) of µTorrent. I noticed that it now runs in "portable mode". That has probably something to do with it. Don't know if this forum or the µTorrent forum is the right place to ask this but here goes...

I want my downloads to go to %USERPROFILE%\Desktop, which has worked fine until now. I noticed that it now suggests some download folder buried deep on the flash drive instead.

So I go into the settings to restore what I want and set it to %USERPROFILE%\Desktop and try again, but it just blatantly ignores that setting.

So I tried selecting a direct path as C:\Users\username\Desktop. Then I get a warning that this won't be portable blah blah. Fine. But it _still_ suggests that download folder on the USB drive.

If I restart µTorrent my setting is gone. The default download location field is blank.

How do I fix this? Or is this a bug?