Insufficient Storage on changing default install location After downloading an APK file from Play Store. It always prompts "Insufficient Storage" dialog.

I changed the default install location into external memory(SD card) using adb command

adb shell pm set-install-location 2


There is a room for both Internal (400mb free) and External memory(8GB free).

I am running on an Android Kitkat 4.4;
I am not rooted anyway. I don't want to void my warranty
By default I think apps are only installable to phone storage. The developer has to specifically allow the app to be installed to external storage (SD card or emulated SD card storage). 
The ADB shell command you have used is only designed for use during development (see http://developer.android.com/tools/help/adb.html). It may be that despite issuing this command the system is still trying to install to internal memory.