Hi Sean,
This seems more like a 3ds Max "limitation" or bug. I actually had some trouble changing render elements' output directory while using Batch Render, cannot quite recall the issue but it was just not working, and manually, through maxscript command running I was able to reset output directories and get the elements saved and the right directory.
I guess you can try something like that, resetting everything which can be "bugging" this, then having a fresh set up of the parameters and outputs you want.
You may also try other formats, depending on the compositing/editing you will be doing. EXR is one that comes to my mind, never had a problem with it.
Regards,
Aram