Your local working copies should be stored on a local drive on your own computer. Storing your working copy on a network will cause serious performance problems and is not permitted (the project will be read-only).
Each user working on a TFS-linked Help+Manual project works on a local "working copy" of the project on their own computer. This copy is linked to the central version on the server. All changes made by all users are synchronized with the server version, and with all the other users via the server version.
This is not an ongoing thing – you normally synchronize once before you start work to merge any changes made by other users with your local working copy and once after work to merge your work with the server version. This makes it possible to work without a continuous connection with the server. You can edit your working copy on your laptop on a plane trip, for example, and synchronize your changes when you get back to the office.
For this to be possible the following preparations need to be made:
1.The project must be stored in the TFS database.
2.Each user must have a linked working copy of the project on their own computer. This should really be local, not in a server folder! Always store your working copy on a local drive on your own computer.
If your working copy is on a network drive you will get significantly degraded performance because of the radically increased complexity of communication with the server.
NEVER store your working copy on a "managed" drive like DropBox, OneDrive or iCloud Drive!