Default "Save As" Location (Should Be From Where File Was Opened...But It Is NOT)

Doing a "Save As" on a file from within an application (e.g. Word or Excel) does NOT default to the location where I opened the file (instead it defaults to wherever I saved the LAST file I was PREVIOUSLY working on). This is WRONG, or at least should be CONFIGURABLE.

Detailed description...

When I open a file using an application on my MacBook Pro (High Sierra), for example MS-Word, if I want to save that file as a different name it is easy enough to do a "Save As". However, the default location for a "Save As" is the NOT the location where I opened that file, but instead it is the location where I saved the PRIOR file that I was working on. Also, unless I have saved a document to the current location (i.e. only opened a file from that folder), that folder does NOT appear in my "Recent Places" list. This is consistent behavior when working in different applications (or at least across MS-Office applications e.g. Excel, Powerpoint, etc.). My expectation (both from a logic perspective and how things work in both Mac and Windows prior to my getting this laptop) is that if I opened a file from a folder, that should be my default folder when doing a "Save As" (and also that folder should show up in my list of Recent Places). It is common behavior to do a "Save As" to save a file as an increment version...but I have to navigate the whole directory structure just to get back to my starting folder (unless I've already saved a file to that folder in that session). How does one change this default behavior?

In case that narrative does not make sense, here is what happens today:

1) Save file "123" to folder "ABC" and close that file

2) Open file "456" from folder "XYZ" (by double clicking on it in Finder)

3) From within the application (Word, Excel, etc.) do a "Save As" (i.e. so you can save as "v2" or whatever)

4) The default location for the "Save As" is folder ABC (the last place I SAVED a file)

5) Folder XYZ does not even show up in the "Recent Places" list

6) I have to navigate from my home folder back to wherever the folder I opened the file from in order to save a copy of the file to the same location with a different name (THIS IS THE PROBLEM...AND IS PRETTY TYPICAL ACTIVITY)

Here is what I would expect the behavior to be...

1) Save file "123" to folder "ABC" and close that file

2) Open file "456" from folder "XYZ" (by double clicking on it in Finder)

3) From within the application (Word, Excel, etc.) do a "Save As" (i.e. so you can save as "v2" or whatever)

4) The default location for the "Save As" is folder XYZ (the last place I OPENED a file)

5) Folder XYZ shows up in the "Recent Places" list

6) Very easy to save a file you a working on with a new name so you can keep multiple versions in one place

Why is the default behavior "backwards" to common sense and traditionally how things work? And is there any way to change this? Appreciate any thoughts or suggestions...thanks!