This is a new problem but is also related to these two previous posts.
https://communities.bentley.com/products/administration/f/product-administration-forum/155429/sheet-index-seed/465187#465187
https://communities.bentley.com/products/administration/f/product-administration-forum/204959/ms-ce-u14---remapping-the-sheet-index
This post may be a bit complicated to follow, but I'm posting it here to reference when I create a service ticket with Bentley.
I'm working in both MicroStation CE U14 and ORD 2020 R3.
I got around the Sheet Index problem by removing the .dgnws file altogether, then have the application automatically create a new one when the parent WorkSpace is selected in MicroStation or ORD. Setting the custom WorkSet properties in a template dgnws file referenced by the _USTN_WORKSETDGNWSTEMPLATE variable gives me those properties in the new .dgnws. The Sheet Index also works.
Here's the rub....I am attempting to relocate the dgnws file to a different location.
I set the _USTN_WORKSETDGNWS variable to the full path for the file in the WorkSet cfg file. Upon loading and checking the variable I find the variable _USTN_WORKSETDGNWS definition is pointing back to the default location and was updated at the User level. Nothing in my Personal.ucf sets this variable. Searching through the msdebug.txt file there is no setting of this variable other than my WorkSet definition. To get around this I locked the _USTN_WORKSETDGNWS in the WorkSet cfg file.
Launching ORD the .dgnws file gets created in the correct custom location, custom properties are there, and I can edit the Sheet Index. However, editing any of the custom WorkSet properties results in them all getting removed when you exit ORD.
Launching MicroStation my custom _USTN_WORKSETDGNWS variable setting is ignored. The variable setting is correct, but the dgnws file gets created in the default location. On the plus side I can edit both the Sheet Index and the custom WorkSet properties.
So after all that I think the .dgnws file is going to remain in its default location with the WorkSet cfg file.
One other note about the Sheet Index....If I create a new WorkSet using a template that has predefined folders in the Sheet Index the folders are retained in the new WorkSet. Removing the .dgnws file and having the the application create a new one on the fly from the _USTN_WORKSETDGNWSTEMPLATE the folders are not present.
There is enhancement request 1100013 to add the ability to specify where the DGNWS file is initially created.
In the meantime you may have to let MS or ORD create the initial DGNWS and then move it to desired location.
Once moved there you may be able to use a combination of the _USTN_WORKSETDGNWSROOT and _USTN_WORKSETDGNWS variables to make sure edits are made to those specific files.
https://communities.bentley.com/products/microstation/b/microstation_blog/posts/configuration-blog-series---dgnws-file-and-workset-template