I still think it's poor that that's what's supposed to happen. I disliked it in R:TW and will dislike it in M2:TW too. Even the text on top of the screen says that there is no governor present and that you should move a governor into this settlement in order to control construction and recruitment. If it's meant to be this way they could at least change the text to say something in the text that corresponds with it. Either move a governor here or uncheck the boxes.
Either way I think it's a poorly implemented feature.

Don't get me wrong I really like TW and love what CA has done, but that thing just bothers me. I know that I can just ignore it and set a rule for myself that I won't exploit this work-around, but it still bothers me.

Cheers!

Ituralde