Additional Information
For information on how to modify the list of search directories, how to add a new directory to the list, or the order of precedence of search directories, refer to the
Search Directories - NI TestStand Help .
The location of the search directories depends on what version of Teststand you are using. In 2014 and earlier the search directories are stored in TestExec.ini. In 2016 and later they are stored in SearchDirectories.cfg.
The deployment utility does use the search directories. Basically if you can't run your sequence file in TestStand then there's a chance it won't deploy correctly.
You can reset to default search directories by deleting either TestExec.ini (2014 and earlier) or SearchDirectories.cfg (2016 and later). Then restart TestStand, it will create a new one of these files. Also keep in mind that the TestStand.ini file stores more settings besides the directories, which you may loose doing the aforementioned action.