The Help file says:
If this path is invalid Notepad++ will backup in the same directory as the file itself.
I pointed the wrong path and backups aren't created.
WinXP SP3, Npp v6.5.5 (and v6.5.4 and v6.5.3)
Indeed - it may have been the case in a istant past, but isn't nowadays. ill fi the incorrect description.
Is there still a way to make the current file directory the place to create the backup folder? As it relates to the file being edited of course.
edited to add:
I just tested under N++ v6.6.6.
If the Custom backup directory is not in use, and the document is opened from its own folder (for instance using Edit with Notepad++ in explorer's menu) N++ creates the backup on save in the document's folder.
If the Custom backup directory is not in use, and the document is opened from a different folder (for instance using N++ Open dialog), the backup is not created.
* If the custom directory is not valid (does not exist), no backup is created.
The difference of behaviour between the first two items looks like a bug to me and you can report it if confirmed.