I'm being plagued with this problem still. Here's my situation...
1) I have reference files in relative paths (I normally have save relative path turned on.)
2) I have temporary files that I reference into a drawing. These temporay files are either on my local computer or on a separate mapped drive (different drive letter from the main dgn).
3) I have reference files in folders specificed by configuration variables.
With MS_DISALLOWFULLREFPATH not set, the full path is automattically saved for each file. So if you attach something and forget to use a configuration varible or save relative path, everything looks good. Then the next person opens the file and the references are missing because the full path is different. Not good.
With MS_DISALLOWFULLREFPATH = 1, the full path is not saved. Now when I try to attach a temporary (which may mean a couple minutes or a couple weeks) file from a different drive letter, everything looks good. I then switch dgn files for two seconds and come back my reference file is missing. Not good.
How can I selectively save full path for reference files?
The full file spec is not the only method by which MicroStation resolves references. In addition to full file spec, you can make use of the following:
When MicroStation opens a DGN file, it searches for DGN files that contain attached references as follows:
1. If the file specification contains a custom configuration variable, it searches that directory, using the relative path, if any.
2. It searches a list of directories which consists of all of the directories for the parent files of the reference. If the reference is attached directly to the master file, the search path consists only of the directory of the master file. If the reference is nested, the path consists of the directories of each parent file, starting with the most deeply nested. The directories searched include the relative path, if any, in the file specification.
3. It searches the directories specified by the configuration variable MS_RFDIR, again retaining the relative path, if any, in the file specification.
4. It uses the full file specification in the reference attachment, if present.
Note that the full file spec is the last place MicroStation looks to resolve the attachment.
The above information is found in the "Locating Attachments" topic of the help.