The maven dependencies are not being downloaded to the default ~/m2/repository location when this option is setup to default. Instead, the local repository is sent to the workspace folder "jenkins_home/workspace/job_name/".

The only way to avoid this was setting the path in the setting.xml file, although this was not an option as this would only resolve for Windows or Linux agents, and therefore the local repository path was set to ${user.home}/.m2/repository, which is resolved by Maven as:

Windows OS: C:/Users/<username>/.m2/repository
Linux OS: /home/<username>/.m2/repository