@peter-vasil
The install directory is handled similar with the installer whether Don't use %AppData% is checked or unchecked. The main difference is the doLocalConf.xml existence which impacts how notepad++.exe saves to the xml files. When notepad++.exe saves to the install directory, then a risk exists when using the installer to upgrade which can overwrite customized xml files.
Information from install logs:
Files
Install
Upgrade
Minimalist
doLocalConf.xml
extract
extract
extract
autoCompletion\*.xml
extract
skip
functionList\*.xml
extract
extract
overrideMap.xml
extract
skip
gup.xml
extract
extract
contextMenu.xml
extract
skip
skip
tabContextMenu_example.xml
extract
skip
skip
toolbarButtonsConf_example.xml
extract
skip
skip
toolbarIcons.xml
extract
skip
skip
langs.model.xml
extract
extract
extract
stylers.model.xml
extract
extract
extract
shortcuts.xml
extract
skip
skip
nppLogNulContentCorruptionIssue.xml
extract
skip
skip
markdown._preinstalled.udl.xml
extract
extract
extract
markdown._preinstalled_DM.udl.xml
extract
extract
extract
DarkModeDefault.xml
extract
extract
extract
themes\*.xml
extract
extract
Theme modifications in the install directory can be overwritten by the upgrade as that is what extract does.
If Don't use %AppData% is checked:
The default Custom type of upgrade install will extract many xml files so to keep customizations, may need to backup before install and merge after install.
The Minimalist type of upgrade install will extract the least amount of xml files so is probably the safest to keep customized xml files.
If Don't use %AppData% is unchecked:
Modified xml files are saved to %AppData% so are safe.