Configured scratch location doesn't work after upgrade to ESXi 6.5

Hi,
My configured scratch location for some reason doesn't work after upgrading to ESXi 6.5.

I set up parameter ScratchConfig.ConfiguredScratchLocation to a persistent storage. The folder exists and worked before the upgrade.

After each reboot ScratchConfig.CurrentScratchLocation is always set to /scratch while ScratchConfig.ConfiguredScratchLocation is /vmfs/volumes/volume01/scratches/host01

I'm not sure if this is related but to upgrade ESXi I had to provide boot parameter preferVmklinux=TRUE as my USB drive wasn't visible and later I run these commands:

esxcli system settings kernel set -s preferVmklinux -v FALSE

esxcli system module set --enabled=false –m vmkusb

Thanks for your help in advance,

Lukasz