Out of the box, off the disk, or from the download, at installation the Backup folder is inside C:/..../Pictures/LR for one simple reason; there is no way that Adobe can know each particular buyer's (or renter's) gear setup. The C: drive is the one constant. But common sense should indicate that a backup that sits next to the original is no backup and the first step after installation should be choosing a new location.
A couple months ago, I and others found that catalog backups made by LR Classic 7.0 and 7.1 were corrupt and unusable. The bug was apparently in the Zip compression LR was using, because Zips of the catalog .lrcat file made using the Windows 10 system tool were OK. The bug has apparently been fixed in 7.2, but I still do regular tests of backups (once bitten, twice shy).