Note that this could happen if the folder exists but the permissions are set such that the folder is inaccessible to some degree. Experience has taught me that Office suite programs are pretty poor at handling permission restrictions like a user has only Read and Execute rights on a folder. This latest problem with Word appears to be an extension of this and it is deplorable that Microsoft can’t produce application software that correctly handles some of the most fundamental features of its own operating systems.
In this case, the user’s home path was set incorrectly in their user account properties and was non existent. This meant that the Documents folder could not be found. When the user tried to save a document, Word simply crashed. I have spent the best part of two days trying to resolve this problem which was obviously user dependent. Office has been installed and uninstalled numerous times, the laptop has been reimaged, the user’s profile dropped and recreated several times etc etc. It was becoming clear I would have to try one more step, a new user account. Before I did this I tried logging on as a different user and it quickly became clear the default Save location is their Documents folder. Then checking the settings for the problem user account, it became clear they did not have such a folder. As soon as that was fixed the problem went away. Note that Office Diagnostics could not solve this problem.