"Download Only" always downloads to the optional directory under whereever your tce directory is.
When no tce directory exists or is not specified then it will default to /tmp
Typically the "Download Only" function is used in conjunction with a tce directory, i.e., a PPR, to persist rarely or only on occasion extensions, which are then loaded upon demand via appbrowser File->Install Optional.
Using this speeds up boot time and allows finer control of which apps are loaded at boot time versus upon demand.
It is not useful when used with tclocal (PPI). You should select "Install Selected" when using tclocal so that the applications are actually installed.