After testing this a little, at the very least, the documentation seems to be outright wrong.
If an application is a packaged desktop application with the equivalent of uap10:TrustLevel set to mediumIL, then the application will follow the regular desktop WER settings.
If an application is a packaged desktop application with the equivalent of uap10:TrustLevel set to appContainer, then WER will create a subdirectory in the AC directory named what was passed into the function and save the dumps there.
"Packaged desktop application" does include WinUI 3 applications here, because WinUI 3 runs as a library inside the desktop environment.