I've always found those settings to be completely unreliable. I don't remember a time when they ever did what they said they would do. I've checked countless times over the years that my settings are what I last set them to be and they always are, they just aren't working.
I currently have "Always choose the best option for me based on my player size." selected and I always get 480p anyway, even with the wide window, and even when the video's available in 1080p.