allow an empty default setting in Flag Filter

I don't understand the request here. In flag's database tables something "not flagged" (False) is the same as being empty.

Also, see the handbook page on Listing content that is not flagged, if that's what you're looking for.

I think the difference is caused by Flag's data storage. Flag does not store "1" and "0" for the status of a flag. Instead it just stores a row if the item has been flagged by a user and deletes a row if the user unflags an item. So having "True", "False", and "Any" doesn't make sense because "Any" is the same as True (the row exists in the database table).

I'm using this workaround:

change $operator = $this->value ? 'IS NOT' : 'IS' ;
to $operator = $this->value ? 'IS NOT' : 'IS NOT NULL OR flag_content_node.uid IS' ;

Note that all this does is makes the False option an Any option, so you can default to False and ge everything in the view.
I figure if it's a binary option, then this is the lesser of two evils - in my case I don't need the 'not flagged' view, just 'flagged' or 'all'.

However a permanent solution would be nice - it would be good to be able to default to 'Any' as with most other filters.

I need to do the same. Where do you put this code?

This was fixed in #403602: Views Flagged Filter Option for Any.