Vault Local Custom Location Catastrophic Failure

With this error description I am not in a position to tell you what is going wrong but maybe if you describe exactly what kind of errors occur, how they show up and what you have to do to make them happen. Providing a log file could also help: How do I enable debug mode on Android?

The “Default storage” vs “Custom locations” is a different implementation of accessing files in the local storage of the phone. “Default storage” uses the java.io.File API and the “Default storage” the Storage Access Framework. The Storage Access Framework does support accessing files on external devices such as SD cards while java.io.File does not allow this.
The reason why we have the java.io.File version is because of legacy reasons, Storage Access Framework is only available since Android version 5.0 and our min supported version currently is Android 4.3.