FWIW, if they don't already, email notifications for *everything* should default to "on" at signup (and for people that haven't visited the forum and updated anything on their profile since the XF switchover, those should be switched to "on" if they are not already).
Xenforo really wants you to use the notification bell icon as your primary source of notifications, which is good, because this dramatically cuts our email sending here and also prevents the user from getting flooded with email.
The question I would ask is: Is this what *users* want; is it how most people "work"? If it's not, it is not the most-helpful behavior.
(I don't know what most people would want or do, but I can guess that this is not it)
Further thoughts progressing from that:
If a user does not come to the forum they will never see the bell or any other in-forum notification.
If a user does not pay attention to icons on a screen but expects to be notified in words in some large obvious way, the tiny little bell doesn't work even if they do come to the forum.
If a user is notified thru an external system in a way that they do check (which we can't know but must assume they will if they provided that as contact method), they should then come to the forum to check.
One option rather than constant emails about every thread / etc is a "bundle" notification, like a single daily summary email, that either includes links to each thread / message / etc that they're subscribed to, or has a single link that takes them to the alerts page
so that they can see all the items that they have not read.
BTW, that page itself could use some better contrast between unread and read items.
Even better is to put all the unread items at the top, even for things that are older than some of the read items.
I realize that most designers of any system (including Xenforo itself) have a way they want things to work, and then expect users of the system to simply adapt to however the designer feels they should work, but this is not how most people work, for the most part--people do what they do, the way they feel like, and often don't or won't and sometimes can't adapt to some arbitrarily chosen way of doing something...so it usually works better to use the most commonly-trained-into-people ways of working, or the most obvious ways of working that they can figure out more easily.
In situations where there aren't any viable choices, many people will adapt because it's that or nothing...but if they don't *have* to do it, they often won't.
Whether the bell is the answer to that in this case I couldn't say, but it does have functional drawbacks.
One of them is that bell notifications aren't persistent. If you click the little Alerts bell icon to see what's there, it automatically clears the bell, and wont' show it again until something changes, *even if you did not yet view any of the notifications*.
This is confusing and unhelpful, because for instance if you have so many new things they dont' fit in the short list the icon presents when clicked, but you do clear that list, you still have stuff that's unread you won't know exists since the bell doesn't stay "lit up" to indicate this.
If I were to change the behavior of this, I would leave it lit until all of the new stuff has been marked read *by the user*, either with the mark-all-read function, or by visiting the Show All page
and visiting each individual link, etc.
3) We write some notes about this in the forum FAQ, new user signup information, etc, so it's very clear to new people that they have this option if they want it.
The cynical view from a few decades of experience with people:
I think you probably know by now that no one reads any of that stuff.
(often enough they dont' even read the list of forums to see where to post, and just post in Forum Rules and Features because it's the first one in the list, or at least the first that lets them post in it).
If it were info that people were forced to actually read and be quizzed on, requiring 100% correct answers, before they could post on the forum, then there is at least a large chance they'd read it--but it's not likely most people would take a test to be able to post here, and would just go somewhere else (since many can't be bothered to even answer questions about their problem that will help us help them fix it
).
So there's not really any good way to actually make it clear to everyone (either new or existing), that these options exist. If they prefer some other method than whatever the default is, and are the somewhat rare type of person that actually checks for what options they might have, or that reads signup info, etc., they'll find out and be able to use whatever options there are.
Not much any of us can do about that but put the info out there for them.
4) At some point we do an experiment, where we make the PHPBB-like behavior the default for new users, to see if this actually improves our new user retention rate + lowers the incidence of new users posting a question, then never returning to read the answer. If we see at least a 10% improvement, we make this the new default.
Of the presented options, this one is likely the most effective for that stated purpose. Those that get bothered by too many emails can hunt down the options to change that (or click whatever link is in each email to get to their UCP page for that). (something more likely to happen than the other way around, where people not getting notifications would come back to figure out why).
But I would still put the info in the faq and signup info.