After creating the scratch folder, you can enter it with it's "human readable" name, e.g. "/vmfs/volumes/Datastore1/.locker-ESXHostname" in the advanced configuration. The folder name will automatically be replaced with the datastore's UUID. Since a scratch partition - which is created when you install ESXi on a HDD - has a size of 4GB, the scratch folder should not require more space.
Did you reboot the host after making the changes?
André