The game does not save settings. "C:\Users\XXX\Documents\Rockstar Games\L.A. Noire\settings.ini" is overwritten with default values after exiting the game.
Topic on Talk:L.A. Noire
Sure it's not an issue with write access where the settings are never actually written to the file? Some AV and Microsoft ransomware protection can cause this....
If you set the values in settings.ini manually, then the settings in the game will be accepted, but after the game exits, the values in settings.ini will be overwritten with the default value. How can some AVs do this? Discussion about this in the Steam community: https://steamcommunity.com/app/110800/discussions/0/3321988498661898276/
AV or Defenders' ransomware protection can work by not allowing not-trusted programs to edit files, like in the documents folder. Have had this in the past for some games...
But wait, maybe your edits aren't actually applied at runtime if you edit it manually and that causes it to get reset when closing the game? And they done protection is blocking the game from editing the file itself?
But from reading that topic, it could easily be a launcher bug indeed introduced somewhen around August... Hopefully will get fixed soon then.