When specifying the search paths for Knowledge Fusion using UGII_KF_USER_CLASS_DIR, the variable is not honored by NX; instead NX follows the search path defined in the registry, and not from UGII_KF_USER_CLASS_DIR.
Solution
In customer defaults (FILE > UTILITIES > CUSTOMER DEFAULTS > KNOWLEDGE FUSTION), turn off the checkbox marked as "Modifiable Search Directories". Restart NX, and the variable UGII_KF_USER_CLASS_DIR should then be honored.
Notes and References
Hardware/Software Configuration
Platform: all
OS: n-a
OS Version: n-a
Product: NX
Application: KDA
Version: V1980
Function: KNOW_FUSION
Ref: 001-10199789