OK, I think I definitely narrowed it down to a whitespace issue. Here is my diagnosis regarding the settings of the scheduled task:

Install path: "C:\Program Files (x86)\my_app\"

-no specified default start path: did not work
-specified "C:\Program Files (x86)\my_app\" as the default start path: did not work

Install path: "C:\temp\my_app\"

-no specified default start path: did not work
-specified "C:\temp\my_app\" as the default start path: worked

Install path: "C:\dir with spaces\my_app\"

-no specified default start path: did not work
-specified "C:\dir with spaces\my_app\" as the default start path: did not work

I am still confused as to why the given start path does not work if it contains whitespaces BUT is enclosed in double quotes...


UPDATE:

Install path: "C:\Program Files (x86)\my_app\"

-no specified default start path: did not work
-specified "C:\Program Files (x86)\my_app\" as the default start path: did not work
-specified C:\Program Files (x86)\my_app\ (i.e. same as above but w/o the double quotes) as the default start path: worked