I hope I understand your question in the right way.
If you want to know, why settings are read from/written to the AppData
folder, then it's because of security/permission reasons.
When first starting your application, your initially application settings from app.config
file were copied to that folder. Your application will automatically work on that newly created file.
This is done, because it's a risk letting the user work on the "global" settings in your Program Files
folder, with which all your users will work. Think about what would happen, if a user only has permissions to read, but not to write to this file.