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Navigate per the underlined and the menu is. [b]Documents > Convert > [u]Text to Default Formatting....[/u][/b]
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FYI, those are two different functions (for those who don't know this).
The one (Make Formatting Default) affects editing you do from the time you change it until the time you change it again. This only changes the default format (designated in the Editor by “No Style”). You can also accomplish this by going into File > Options > Editing > formatting and editing the options there to match the current paragraph. Make Formatting Default gives you a single command to copy the formatting of the current paragraph to the Default Format. As an analogy, this is like mixing a bucket of paint.
The other (Convert Text to Default Formatting) affects your existing text that’s in the default format (that is, with utterly no style applied) that’s in the selected documents in the Binder. Using the same analogy, this is like using that mixed bucket of paint to paint various walls in various rooms.
Not sure why this is a disconnect, though. Perhaps you can explain your thoughts a bit more on this?