Installation profiles provided by Drupal core are now contained in:
/core/profiles
Contributed and custom installation profiles can now be located in any of the following locations:
/sites/all/profiles
/sites/[site]/profiles
/profiles
Previously, installation profiles provided by Drupal core were mixed into a single /profiles
directory, which also served contributed and custom installation profiles. The lack of separation made updating/upgrading Drupal core harder.
The new locations not only provide a proper separation between Drupal core installation profiles and custom/contributed installation profiles, but also allow to limit installation profiles to a certain site/domain (if known upfront before installation).