I found the location by examining the app while it was running.
The associated libraries are at:
%localappdata%\arduino15\Libraries
That will look like : C:\Users\<username>\AppData\Local\Arduino15\libraries
I created a new folder named DS3231 dropped in the .cpp, .h and .config files and now my sketch compiles with the #include <DS3231.h>
Kind of blows my mind that the Arduino 2.0.3 Libraries are found in a directory named Arduino15. Is that an old version or something?
Here's what I see in preferences -- don't see a location for user libraries:

The best location will be your sketchbook location + a folder named libraries.
For example, in my case my sketchbook location is :
c:\users\<username>\dev\arduino
so my library folder should be:
c:\users\<username>\dev\arduino\libraries