Symptom:
When you do a standard catalog request to provision a VM from a template in this vDC, it correctly sees the "Deploy to Folder" value in the Computing Policy and puts the new VM in the specified folder in vCenter. But when you do a standard catalog request to provision a VM from an ISO, it puts the resulting VM at the root of the vCenter DC rather than in the specified folder. I.e., when doing a standard provision from ISO, it appears to ignore the "Deploy to Folder" part of the Computing Policy.

Conditions:
You have a folder defined in vCenter, and you put the name of this folder in the "Deploy to Folder" field of your Computing Policy for a given vDC. 

This issue has been found by customer, and re-created in TAC lab. In both cases, this was tested in UCSD 5.3.1.2 with vCenter 5.5.