The DEFAULT applies if you create a new domain from now to further...
PROPAGATION takes that DEFAULTS and applies those to ALL EXISTING domain and users, ALL of them, nothing excluded.
I think that the explanation is correct.
Maybe you don't understand it well.
Gabriele Maoret - Head of SysAdmins at SERSIS
Currently manages 6 SmarterMail installations (1 in the cloud for SERSIS which provides services to a few hundred third-party email domains + 5 on-premise for customers who prefer to have their mail server in-house)