Update: after further testing I have found the issue was caused by another unrelated process that was transferring an existing %appdata%\notepad++\ profile and so the config.model.xml was not being used used to generate a new profile.
Resolution: By manually removing the %appdata%\notepad++\ profile and then opening notepad++ the config.model.xml worked as expected and the updated settings were create the %appdata%\notepad++\config.xml.