Yes, it has.

I switched to registry in the settings, however I still couldn't find the configuration in the desired path. Does Windows registry have a similar sandboxing mechanism for UWP as well?

Indeed, there seems to be some change or bug in Windows 11 that causes WinSCP to default to using an INI file. Thanks.
Issue 2245 – Windows Store installation on Windows 11 was incorrectly using INI file for configuration storage by default

Thanks for the instruction. I have successfully found the config file.

martin wrote:

Though I wonder why do you want to use an INI file with Windows Store installation. INI file is mostly useful for portable use only.

The Windows Store installation on my computer defaults to using INI files.
I was doing an SSD upgrade on my laptop, so I needed to migrate my config files. At first, I followed the documentation which says WinSCP defaults to using the Windows registry, but with no luck. After reinstalling WinSCP on the new drive, I found on the settings page that the default location is the INI file.

Windows Store sandboxes some folders.
See for example Special Name for Microsoft Store App User Data Locations (like - Microsoft Community.
So you will find that file in
%LOCALAPPDATA%\Packages\MartinPikryl.WinSCP_tvv458r3h9r5m\LocalCache\Roaming\winscp.ini.

Though I wonder why do you want to use an INI file with Windows Store installation. INI file is mostly useful for portable use only.

The settings page shows that my config file is stored in the AppData folder (and also in the session log files).

However, it is nowhere to be found.
I am using the Microsoft store's version of WinSCP