I'm having the same issue and have tracked it down (at least for me as follows)
1) Only occurring with new Invoice Layout
2) Turn flag OFF
3) Edit any invoice. Pay attention the to Invoice Number box. It starts out as "generated". Then the page auto-refreshes, and the generated Invoice number now shows in the box.
4) Return to settings and the flag has been switched to ON.
I have reverted to the old layout and am no longer having this issue, but it does need to be resolved. I have also sent a note to support.
