This documentation applies to Avalon 7.0+ when Matterhorn is retired. Go here for Avalon 6.5 version.
When the Avalon worker is running on a different server than Avalon and they don't share the same filesystem (and filesystem paths) for both the Rails web upload directory and dropbox, Avalon uses something called a working file path. The working file path is the full path for the file itself, and is used to refer to a copy of the originally uploaded file where Worker has access and at a path shared by both servers. The working file path is stored on the MasterFile so that it can be cleaned up by a background job after the MasterFile has finished processing.
For example, if Worker is running on a different server and Worker's ingest directory is '/srv/shared/ingest' and mounted on the Avalon server at the same location and Avalon's dropbox directory is '/srv/avalon/dropbox' then Settings.encoding.encoding_file_path should be configured to be '/srv/shared/ingest'. Note that the directories must be named the same on both the Worker server and the Avalon server since absolute paths are sent to Worker from Avalon.