From your screenshots, it looks like you’re confusing two different things:
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what the document looks like in the editor while you’re writing it.
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what your final document will look like when it’s compiled.
Default format in the editor
The screen shot you’ve shown is exclusively for the first issue. That dialogue you’ve opened allows you to change the default formatting for THIS project only, otherwise the formatting in Preferences > Editing> Formatting will apply. You have to tell Scrivener that you want a special format for this project, and you do that by ticking the “Use different default formatting for new documents in this project”. You haven’t ticked that in your screenshot: once you’ve done that, the formatting tools will become available.
[attachment=0]Screenshot 2020-10-23 at 04.29.40.png[/attachment]
Convert existing documents in the binder to the new format
Then, when you’ve set it up the way you want it, you need to select all the documents in the binder you want to change and press Documents > Convert > Text to Default Formatting.… and every appropriate paragraph in those documents will change to your new format.
This is covered in the Tutorial under the section: Default Formatting.
Changing the look of the final output (Compilation)
Now, changing the default style for the editor while your writing is a different process from changing it for the document which is compiled. There’s a very good reason for this, and it goes back to one of the main reasons why Scrivener exists in the first place, and that’s to Write Once – Compile to Many Formats.
When you write a novel in Word, you basically write it in the format you’ll going to publish it: if that’s a typical submission to a publisher, you write it with one font / margins / line spacing etc. If you change your mind and need to send a camera ready copy to self-publisher (different font, margins, page size, line spacing, paragraph layout etc) you have to completely reformat the Word document itself.
Scrivener is different: you write the document in the Editor once, in the format you like writing in (font can be green Comic Sans 22pt if that’s what you want).
It’s only when you compile that you choose what the final output will look like: a manuscript for a publisher, an Ebook, a PDF of the paperback and so on. Each of those formats has its own different specific requirements, but Scrivener handles all of that for you, without you having to change the edited text itself.
You simply say: “I want to compile to a traditional Manuscript using Courier”, make a couple of choices about how you want the Chapters titles to look etc, and press compile. The program comes with many default compilation targets and layouts, but you can of course amend them if you want.
How does this work?
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The compiler knows that a certain compilation format will typically use a certain paragraph layout. e.g. the Manuscript (Courier) format has paragraphs with a 0.5in indent, 1" margins, double-spaced Courier, while the Paperback may have 0.2" indent, 1.2 line height Palatino. The compiler takes your 22pt green Comic Sans default paragraph from the editor and translates it automatically to the default paragraph for the compilation format you choose each time.
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In the Editor you tell Scrivener what type of thing each element in the binder is: is it a Chapter? is it a scene? (This is usually done for you depending on the hierarchy in the binder – folders are Chapters, Scenes are scenes. NB: the actual name of the Section Type is irrelevant, as long as it’s different for Chapters and Scenes). This is called the elements Section Type. When you come to compile the project, you choose the format (e.g. Manuscript) and then Assign Section Layout. In the dialogue that comes, you choose a look (a Section Layout) for each of your Section Types. This is where you tell the compiler what you want the Chapter headings to look like: you will see several default options in the list: “1”, “Chapter 1”, “1 The Beginning”, etc etc and you choose the one you want.
You save your choice and press compile.
What happens if the compilation defaults don’t meet your precise needs? E.g. you don’t want the default paragraph to be indented: well, then you can amend the Section Layouts and almost every other aspect of the format to you taste – but this post is long enough as it is…
You’ll find the basics of how to compile in the Tutorial in Compiling the Draft.
It’s taken me a while to type out the explanation of this, because I thought it may help you to understand the reasons why it works this way, but the basic process is very simple:
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Write the thing in whatever default format feels comfortable, and tell Scrivener what each bit of the project does (Section Type)
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Compile it to whatever format you need, and tell scrivener how you want each Section Type to look (Section Layout).
If you don’t have any major changes to make, this literally takes 30 seconds – it’s a lot easier to do than describe!
HTH.