My apologies but I don’t know what happened to the explanation I typed up of the issue I am experiencing because it looks like most of what I typed is not there.
When I open preferences in Obsidian I am changing the setting in “Files & Links” about where to save attachments in notes. When I change it to “In subfolder under current folder” but that change does not appear to be saved.
The screen recording of what I am doing can be found here: