"Storage does not follow the folder location of the previous save.

Actions have always worked this way, you would need a script to store and retrieve a folder path for saving.

Generally: Make sure the path is not recorded in the action.How to achieve this? I just downloaded and tested it and it's the same.

"You're right, my 'save path' is being recorded. It always defaults to that path, instead of following the last saved location. However, this same action works fine in version 2025 26.0. This issue started occurring from version 26.1 onwards."

"Yes, it can save as JPEG. What I mean is, for example, when I record the 'Save' action, a dialog box pops up asking to select the folder location. I choose a folder named 'Folder 01' and save successfully. When I click the 'Save' action again, it doesn't follow the previously saved file location 'Folder 01'. Instead, it pops up the location you saved to during the action recording. I want the second click of the 'Save' action to pop up the previously saved 'Folder 01' location, rather than having to manually select it again. In other words, it fixes the saved file and folder location. This same action works fine in 2025 version 26.0, but this issue exists in version 26.1 and later."

Are you saving to jpeg? Then you need to include steps in the action that makes the file conform to the jpeg specification prior to the save. Flatten all layers, reduce to 8 bit color depth, delete alpha channels.

An operating system change a while ago made it impossible to directly save out a copy if the file has properties not supported in the target file format.

Generally: Make sure the path is not recorded in the action.

If it's highlighted in blue in the save dialog when you record, the save path is a permanent part of the action. It's also possible to re-record that specific step without re-recording the entire action. Just double-click the step.