We figured this out. In older versions of macOS that message appeared and included instructions about what settings to change in order to use Store File in Folder. Making those changes works in Catalina as well. The message is now less descriptive in the newer driver and the changes need to be made manually for the job type to work. Here is the previous message shown in High Sierra for anyone else that might wonder about this.
It has been brought to my attention by 2 different coworkers, and subsequently verified on my macOS test system, that trying to use the "Store File in Folder" job type on macOS 10.15, with the latest 5.3 driver, results in a message stating "Changing the setting of Job Type to Store File in Folder would cause a conflict that cannot be resolved. No change will be made". The normal dialog for Store File in Folder then appears but the job type reverts to "Normal" before submission. Is it possible for Xerox to confirm whether this is a newly imposed limitation by Apple that cannot be worked around, this wouldn't be the 1st feature to become unusable due to Apple policies, or if this is something that Xerox is aware of and is actively attempting to correct in a future driver?
I chose the C70 for this as this was the most recent model that someone asked me about in regards to this but I have also seen this inquiry in regards to the D series, and I assume all other models with this function that are supported by the macOS UBPD.