To keep file index (and hard copies) TC needs to copy file with new name %N.bak to make backup (and it does it with CompareSaveOriginal=1) - and it doesn't matter at all where to put backup file (same folder/same drive/any special folder) since it will be always copy operation. But it will be great if TC put backup files into special place for backups and not to leave garbage in source folder (it is not so hard to get backup from special folder when needed).
Also such key will allow TC to work normally if source folder is write-protected but compared and edited file has full permissions since TC won't try to add new file into protected folder, just modify existing one.
And, such option doesn't require localization, just few lines in help file.

(I think it was discussed some times but I coudn't find topic)