Hitting the Show Project in Finder button in that dialog would show you the relevant place too.
You should sort this out by moving that project file in the Finder (after closing it in Scriv), not by saving from within Scrivener. You need to get that project out of the scriv backups folder (and any other non-backup project files that might be in that same folder).
The Recents menu item has this downside: it cannot distinguish between the live projects you are working with — your master projects — and anything else you might happen to open (like a backup file). So, it can get populated with things you don’t really want to be opening (inadvertently) and working in. I much prefer the Favorites menu item, because I get to tell it what are my main projects and then those are what show in that menu. I keep most of my scriv projects in a common folder, so it is easy to open the occasional non-favorite from the Finder when needed.