Drush sql-sync not placing file in specified dump-dir
I actually posted the same question in the Drush GitHub and they did in fact tell me that sql-sync was rewritten (removed in e89c7c4) and it no longer includes the option for a dump-dir.

As per GH #2125, they've said:


  It gzips and transfers the full dump every time. It uses a temp file in your specified temp dir for the transfer. Files are deleted right after rsync.


So I guess all documentation that is out there is old.