Description of the need
If you ever set the Default picture on admin/config/people/settings, then you could have an impression the settings in the next section for Picture display style would apply to the default picture.

Unfortunately, it's not true as the HTML-code always shows:
<img src="http://in.docksal.site/files/pictures/default_image.png" alt="Backdrop CMS's picture" title="Backdrop CMS's picture">
for the default picture. However, if a user uploads his/her own picture, then the image style kicks in:
<img src="http://in.docksal.site/files/styles/thumbnail/public/pictures/picture-1-1614678151.png" alt="Backdrop CMS's picture" title="Backdrop CMS's picture">
Proposed solution
I don't see any reasons for the style selected in Picture display style section not to be applied for also the default picture. If you, guys, support this feature request, then I could offer a respective PR.
Recent comments
I use Lando (a wrapper for docker) and find settings changes happen straight away
How often is the settings.php loaded.
You might need to add a Relationship in the View to Flags. Or there might be a setting on the content type. I can't recall for certain but I think it's possible.
No Flag fields in Views
Try using caching in the View settings, set to 24 hours. This should work for anonymous site visitors.
View to show a different node each day