The option is applied when record is created.
You can use "Replace Field Contents" to change existing records.
The auto-enter you have set up is the right thing for all new records - they will automatically be set to No when created.
For existing records, you want to use the Records > Replace Field Contents… command. Easiest is to set one record to No and then choose the command from the menu. Then accept the option to Replace with: "No" for all records in the found set.
Is the field a Text field ?