When it says that new Projects are created with the Default Project Permissions, it means the actual user and group permissions.
Unfortunately (I think), the setting for 'Locked to Project' or 'Managed by Owner' are not copied.
It would be great if it did. It may be worth putting forward an Idea for this, as it would be useful to have.
All the best
Thanks, Glen! Looks like I interpreted the documentation wrong due to wishful thinking I'll submit a product idea shortly.