By default Eclipse deploys web application to a internal plugin folder called wtpwebapps, which is located in the following directory :

{Your_Workspace}/.metadata/.plugins/org.eclipse.wst.server.core/tmp{number}/wtpwebapps
#Example 1 - Windows
C:\Users\mkyong\workspace\.metadata\.plugins\org.eclipse.wst.server.core\tmp0\wtpwebapps
#Example 2 - Mac OSX
/Users/mkyong/Documents/workspace/.metadata/.plugins/org.eclipse.wst.server.core/tmp0/wtpwebapps

How it works

In Server view, double clicks on the “Tomcat Server”, the deployment work is defined in the Server Locations

To edit the default behaviors, clicks on the Open Launch Configuration, select Arguments tab, the deploy path is defined in the VM arguments :

VM arguments :

-Dcatalina.base="/Users/mkyong/Documents/workspace/.metadata/.plugins/org.eclipse.wst.server.core/tmp1" 
-Dcatalina.home="/Users/mkyong/Downloads/apache-tomcat-7.0.29" 
-Dwtp.deploy="/Users/mkyong/Documents/workspace/.metadata/.plugins/org.eclipse.wst.server.core/tmp1/wtpwebapps" 
-Djava.endorsed.dirs="/Users/mkyong/Downloads/apache-tomcat-7.0.29/endorsed"