Shrug don't remember the last time I actually needed to modify a system config file on Windows...

Everyone knows the real power of configuration on Windows is regedit.

Docker: right where you chose to put it.

To be fair sometimes configs instead of XDG_CONFIG_HOME(~/.config) are stored in XDG_DATA_HOME(~/.local/share)

For Linux applications that respect XDG? Sure. There are plenty that don't because they either predate that specification, or they just don't care. Linux filesystems are generally much faster at executing reads on many small files, meaning fast search tools like ripgrep and fd make it so I don't really have to care. They'll run through my whole $HOME in 5 seconds flat. There's also stuff like locate, although I don't like maintaining an index. SSDs are so damn fast that I can just rg --hidden --glob '*.toml' 'the_setting_i_want_to_change' ~/ whenever I want.

Have you found appdata/local/Application Data? It's a "conjunction point" that you can only find via the command line, and only exists for backwards compatibility. It points to appdata/... Do not EVER try to gain access over all your files in appdata/. It'll break due to that conjunction point.

To this day, I still don't know how to set a path variable permanently in any Linux distro

/etc or /usr/local/etc and done