Just for everyone's information:
When you are in an album your search is done on items that are contained in that album. This has nothing at all to do with the option you reference. That option states that the normal search [b]from search page results[/b] will be either a search of the results or a new search.
Quote:Default search sets how searches from search page results behave. The search will either be from within the results of the previous search or will be a fresh new search.
Of course you can override this behavior in your theme by passing the appropriate parameters to the function that prints the form, but I suspect that it will end up confusing your users.