Thank you for joining this thread, @jeffmjack.

First off, changing the Automatically apply credits feature in QuickBooks Online (QBO) will not affect transactions that have already been applied. When you create a new Credit memo, this will not apply to any open invoices.

If the Automatically apply credits feature still affects your newly created credit memo, I recommend to perform some basic browser troubleshooting steps. This will help to refresh the background processes of your browser. 

Please follow the steps below:

1. Open your QBO account in a private browser. Then create a credit memo. 
2. If you no longer experience the same thing, go back to your regular browser and clear the cache. 
3. If you still encounter the same problem after using a private browser, you can use other supported browser.

However, if the issue persists after doing the troubleshooting. I suggest reaching out to our QBO Care team. They have specific tools to do a remote session and will verify what causes the issue and fix it for you.

Here's how:

1. Go to the Help menu.
2. Click Contact Us.
3. From the What can we help you with? field, enter Quickbooks is automatically applying a credit to an unpaid invoice.
4. Hit Let's talk. 
5. Choose either Start messaging or Get a call. 

If in case you notice that these payments are creating an overpayment, I'd attached this article which contains detailed steps for what you need to do: Apply A Credit From An Overpayment.

Should you need additional assistance, please let me know. Take care always.