From a security standpoint I would not allow other locations. Why does it matter where you can store them?
[EDIT] To get within Java the path to the temp directory in the cloud see this post
Thanks for the reply. The java action merges two PDF documents and then requires it to write the merged document to a file on the cloud. I then read from the stored document to get an InputStream so that I can use the Core.storeFileDocumentContent method to create a file document in my Mendix App. I then delete the temp file created. It does not matter where I store the temp.pdf only that my merger action (using Apache PDFBox) can store a file to read from. I essentially am merging a portrait pdf doc with a landscape pdf doc. The Java action works as required on local system. My only hurdle is the writing the temp file in cloud.