In order to prevent spam/phishing, new users have to have either 3 verifiable observations OR 3 IDs for others before sending messages. You shouldn’t need to create observations to meet this requirement.
As Blue said, the default is CC-BY-NC. There is a whole topic about it here if you want participate in the discussion.
That’s not entirely true. The web signup looks like this:
And clicking Learn More by the check box gives you this:
It’s explained that the default is CC-BY-NC, and by unchecking the box, you can switch to All Rights Reserved. The other licensing options are available after logging in for the first time.
As for the bug, I can confirm that when I use the new account settings page to change my default license and check the box to update previous observations, the previous observations do NOT have their licenses updated.
I modified the topic title to clarify this is in the new account settings page.