It looks like the machines directory can't be set directly through config. It is set relative to a base directory in instance_dirs.go.
That base directory, by default, is the .minishift directory in the home directory of the user, e.g. C:\Users\[user]\.minishift on Windows, but this can be overridden by setting the environment variable MINISHIFT_HOME.
The base directory could also be a profile directory, if you are not using the default profile (the default being minishift).
$ minishift profile list
- minishift Stopped
$ minishift profile myprofile
Profile 'myprofile' set as active profile.
The machines directory for myprofile would then be created under $MINISHIFT_HOME/profiles/myprofile/machines, e.g. on Windows C:\Users\[user]\.minishift\profiles\myprofile\machines.
So you can set MINISHIFT_HOME and move the whole contents of the .minishift directory, including machines, somewhere else but it doesn't look like you can move just machines alone.
Perhaps, you could solve this at the OS-level by creating a symlink between C:\Users\[user]\.minishift\machines and D:\My VMs\.