Additional nginx Directives

I am trying to add the following nginx configuration to Plesk through
Website & Domains -> Web Server Settings

The conf i am adding is:

location /folder/folder/ { try_files $uri /folder1/folder2/file.php; }
or
location ^~ /folder/folder/ { try_files $uri /folder1/folder2/file.php; }

but it doesn't seem to be working.
/folder/folder/blah-blah/blah-blah/ gives 404

 

any thoughts why "try_files" work on local machine and not on plesk directives ?