This requirement is too exotic to add it to the regular Vassal code, it would confuse 99.9% of all users. But Vassal is opensource, you could get the source code, and change it to use another location.
What restrictions do you have on using your system drive? If you have rights to make changes but have problems with space, you can move the VASSAL folder somewhere else and create a junction using the mklink command.
If you have problems with the files appearing at all under APPDATA (even under a junction, for example quota issues on a server), you can redefine the environment variable for Vassal by using a launcher batch file. For example, create D:\Fake and put this in Vassal.bat:
set APPDATA=D:\Fake
C:\Program Files\VASSAL-3.4.2\Vassal.exe
Then make sure you always start Vassal with this batch file. The global environment won’t be modified, but the launcher and any modules launched will use the new value instead.