Default Value when creating defect is not populating

I have set the default value for auto populating the Folder a defect should fall to when creating a defect, but the value that I selected as the default is not populating correctly.   The incorrect default value is also only populating when manually creating a defect.   When a defect is auto-created when running test case, the default folder is not being populated at all.   Any ideas as to why or how to get this workflow to work correctly?