by Joshua Todd Cowper.
Changing the setting in Site Administration will set the default for new assignments, but it will not alter any existing assignments. With regards to the text on this page that says 'Default: Yes', this is simply informational text letting you know that the default in a clean Moodle install is to have this setting set to yes; it doesn't mean your chosen setting hasn't taken effect. You should find that if you change the Site Admin setting and create a new assignment, it has indeed taken effect.
To change the default setting on an existing assignment, go to the individual assignment's settings, scroll to the Notifications section and change the default setting there for that assignment's grading form. I think this is likely what you are missing. Of course, the grader can then override this for each submission.