When you change the GPO with your Folder Redirection settings to a different file server, no matter how many times you GPupdate it the settings will never apply.
This is because if you manual folder redirect on the local machine, it will ask you if you want to move the files over to the new location. The GPO can't do this when you change paths and will never process it. 

To solve this issue you need to perform a few steps to make it work:

1. Robocopy the user directories to the new server or completely detach the virtual disk and attach it to the new virtual machine. Whatever floats your boat.
2. Configure the Folder Redirection GPO to Not Configured and let it apply to all your users
3. Once you are sure the policies has been applied, change the GPO again but change the path to your new server and reapply it to all your users
4. Now check if folder redirection works for all  your users

Another way to do this, but dirty without changing the GPO is by modifiying the registry keys. 
You can find the keys under 

• HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Shell Folders
• HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders

You can easily recognize them because they contain the values for the old server. Change them to the new path and log off/on the user and it should redirect immediately.