I had the same problem and I'm not sure if it was caused by TM/RSRD mod or when you select "Easy" or "Normal" etc for skill level.
When you are in port, in the 'office' (where you select your crew and sub equipment etc), you'll notice up on the shelf on the left, a radio. Click on that to bring up Options and try setting them from there. I think this is where it overrides the main menu gameplay options.