READPROFILESTRING requires the full path to the file. This is denoted in the KiXtart Manual.

File name
A string that names the initialization file. If this parameter does not include a full path, Windows searches for the file in the Windows directory.

This is actually untrue. A relative path is perfectly fine.

The problem occurs if you specify a path name with no path elements to it, i.e. a bare file name. In this case the API looks in the system default location(s) for the file.