When we create a new document (ex: Word Document) in SharePoint 2010 document library, while saving the document you will notice the following dialog box,
Which means that the document is going to be saved on your local hard drive and not on the SharePoint site.
This issue seems to be by design in SharePoint 2010 when you do not have content type associated with the Document Library, but this behavior is not reproducible if we have a custom content type associated to the Document library.
Workaround fix:
Open Microsoft Word, click on File -> Options
Open Microsoft Word, click on File -> Options
Click on Trust Center in the dialog that opens
Next Click on Trust Center Settings
In Trust Center Settings click Protected View tab and uncheck Enable Protected view for files located in potentially unsafe locations as shown below.
Click on OK to close the open dialogs and close Microsoft Word.
