On the NaNoWriMo forums setting all subs to watching when the top category is set to watching would be a nightmare for our users and a performance issue.
The entire reason we have default muting enabled is because the category that contains the sub-categories for our local regions has 700+ subcategories.
The only way I could see this being a reasonable option there would be if there was a way for an admin to choose to disable the auto behavior on the subs for categories that don’t need it.