Since the last major update for the desktop player, about 2 years ago, we lost a great feature: setting a limit to the max cache size.
We also got a brand new bug: even though you can set a cache folder location on the advanced menu the app actually uses the App Data folder, on your Windows hard drive.
This bug is old and needs to go away. You can see countless posts about this on this forum and many other websites. Even after the major SSD Bug that was discovered they still weren't able to fix this. I tried emailing Spotify support and it took 10 back and forth emails to finally realize this problem was on their end.
As it stands right now, setting a cache folder inside the app is completely useless and if you use an SSD as your Windows drive you are definitely allocating a lot of space and read/write cycles to Spotify, keep that in mind.