If you are talking about Properties.Settings.Default (in C#), which you added in the Settings of the project's properties window, then, yes, it behaves differently in EXE (desktop app) and in DLL.
The default values of settings you created in the project are embedded in the application (EXE or DLL) as resource data, and then
1. In EXE app, the settings eventually does into YourApp.exe.config, where you can manually change the settings values in *.exe.config file any time, and the EXE app will read the setting data from *.exe.config file, instead of using the embedded default value;
2. in DLL app, the DLL building/compiling will create a YourApp.DLL.Config file and save the settings (with default valuer in it). HOWEVER, the application that uses the DLL (AutoCAD, in this case) DOES not automatically go to this *.dll.config to load settings. Theoretically, after compiling the DLL, you are supposed to merge the settings in the *.dll.config into EXE app's aa.exe.config (in this case, acad.exe.config), and the *.dll.config file is not needed to be deployed with your app; Or you need to write code to explicitly let your DLL to load settings from the *.dll.config file. In your case, since you did not merge the settings in *.dll.config into acad.exe.config, nor you have code to specifically load the settings from *.dll.config, thus the DLL code will ALWAYS use the default values you entered in design stage, which is embedded with the DLL project.