Setting: Cakewalk copies audio files from my standard directory and puts them elsewhere

Where is the setting to turn this feature off?
I don't need another copy of my audio files just because I'm using a new version.

Right - except for I'm not doing that. I'm just saving an existing file with existing audio from a previous version - and it's saving the audio data over to a new folder.

I believe the thing with Phil is he has a single location audio Pool that he uses and does not want to duplicate those files on his machine Johnny.  Though I think it does make for some interesting issues when backing up projects. 

That is the way it has been for a while now even with Splat. 
They made the Per Project option the default. I don't think there is a way to shut it off. 
It was probably because every one wanted the per project as default because the old global audio folder was a bad idea and made it hard to back up songs. There used to be a lot of threads from people who had a huge mess and had lost track of their audio files. 
 
I used to have to manually make a project folder before saving a  song. Now it's done for me so I certainly like the feature the way it works. Saves time. 
Example you open a midi file and then SAVE AS to a Normal ( CWP ) file it will create a folder and put the CWP and an audio folder in there. Done. Ready to work on. 

The "New Project File" and "Save As" dialogs still provide a way to set the audio path. There is nothing to prevent multiple (or all) projects from using the same path. When specifying an alternate location for audio, keep in mind the project stores an absolute path to the audio folder instead of a relative path.