When you refer to "the panel where I have to select the save location," if you mean the Backstage area which covers up the entire document except for its Window Close button, then that is the way Word 2013 was designed to work when you hit the save button.

If, instead of using the save button, you use a keyboard shortcut (such as CTRL+S, F12, or any shortcut you create yourself) to save the document, then Word gives you the option of showing or hiding that Backstage area.

Drop down the File menu, select Options, and go to the Save tab. Check the box for "Don't show the Backstage when opening or saving files."

In case you haven't noticed yet, the "Default local file location" is only used when you first start a Word session, before the "current folder" has been established yet.