After starting a new qbs project I realized it created the build directory in the parent dir of the project which is usually not the place where I want it to be, so I edited the "Build directory" under "Build settings".

I did it by hand and not by the "Browse" button, and I realized it runs qbs after every single keypress in the LineEdit.

So after changing the "Build directory" to "C:\BUILD" it created the following directories:
C:\B
C:\BU
C:\BUI
C:\BUIL
C:\BUILD

And of course it created the proper subdirectory structure in every one of them.