In the Assignment settings page the Notify student setting overrides the setting in the individual students grading form. Teachers are unable to change this setting for individual students.
For example in the Assignment settings Notify students = No. A teacher decides to notify an individual student of their grade navigates to that students Grading form changes the Notify student option from No to Yes Saves the change, but when the teacher goes back in to the grading form the option has reverted back to No.
Is this the way this setting is meant to behave?