The Directories page on the Advanced Site Settings dialog allows user to configure initial session directories and the way how directory content is read.
Refer to documentation of page sections:
The Synchronize browsing checkbox enables synchronized browsing for this session. The option is available with Commander interface only, and when remembering state of both panels is enabled. Note that you can always enable synchronized browsing later once logged in. If you save your site, value of this option for the site will get updated with current state on each session close.
When the Remember last used directory checkbox is ticked, the initial directories for the session (see Remote directory and Local directory), as well as synchronize browsing state, will always be updated with the last opened directory from the last session. It makes sense to use the option only if you save your site, because it is the saved site that gets updated on each session close. The option also suppresses the effect of preference option Default directory is home directory.
The Remote directory box defines the initial remote directory opened in panel. When Remember last used directory is ticked the path is updated whenever the session is closed. When the initial directory is not specified the user home directory is usually opened on startup. Note that this may not be true particularly for SFTP servers.
The Local directory box defines the initial local directory opened in local panel on Commander interface. The path is not used with Explorer interface. When the initial directory is not specified the local user My Documents folder is used.
The initial directories also define home directories (for Go To > Home Directory command) when Default directory is home directory preference option is enabled and Remember last used directory session option (see above) is disabled.
Once logged in, you can also update the initial directories of existing site.
Cache visited remote directories, Cache directory changes and Permanent cache checkboxes control directory cache.
When WinSCP reads directory content, it by default also resolves any symbolic links (symlinks) it finds. Particularly to learn if they point to file or directory. If a directory contains too many symbolic links, it can slow down opening the directory. You may disable the feature by unticking Resolve symbolic links to speed it up. You may also use the option when WinSCP hangs when resolving cyclic links. While WinSCP detects most cyclic links, it can still hang when it encounters more complex symbolic link “systems”. Note that when the resolving is disabled, creating links is effectively disabled too. Also when the resolving is disabled or not supported, double-clicking on any remote file will be interpreted as an attempt to open the directory with the same name.1) This allows opening links pointing to directories even when WinSCP does not know they are links.
Check the Follow symbolic links to directories to have WinSCP follow symbolic links to directories, when operating with remote files (e.g. while downloading or deleting). The option is not available with WebDAV protocol.
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