The /etc/sysconfig/ovirt-engine file contains a comment indicating the location of the defaults file, but this comment is wrong, it should point to /usr/share/ovirt-engine/conf/engine.conf.defaults.
The patch to fix the issue is available here: http://gerrit.ovirt.org/9990
The change has been merged upstream: http://gerrit.ovirt.org/gitweb?p=ovirt-engine.git;a=commit;h=48f5c7ee633d2473f067b9fa778491350482232b
3.2 beta built, moving to ON_QA status to allow testing