For those unfamiliar: this question refers to the Conversions > Goals > Reverse Goal Path report, with a destination goal, so the Goal Completion Location will by definition always be
Goal Previous Step - 1 will be the previous page hit, regardless of whether there's a funnel defined. So in your example
Foo → /A → /B → /C → /D, the previous step 1 value will be
(entrance) as the Goal Previous Step - 1 means the person landed directly on
/D. Defining a funnel does not restrict goal conversions to people who go through the funnel, even if you've marked it as required - anyone who hits
/D will count as a conversion.
What a funnel does accomplish is to give you more information about how people convert and where they abandon the process, via the Goal Flow and Funnel Visualization reports. The Funnel Visualization report will be limited to sessions that hit the first step of the funnel if you've marked that first step as required, but otherwise the funnel is just extra context.