DO NOT SKIP the mouse_smoothing_mode step in my description.
When Bungie fixes this issue you want to revert 1 setting on all 3 files, you want to uncheck Read-Only. Select all 3 files(cvars.xml cvars.old cvars.tmp), right click, properties, uncheck Read-Only, apply, ok.
Destiny 2 - How to fix Video Settings going back to Default issue
Here is a walkthrough without the video:
This worked on Windows 10 and Windows 7 so far, let me know if other versions worked for you.
Make sure the game is closed before starting this and do not skip any step!
1. Click the "Search" icon on the Windows Start screen. Type "%appdata%" and press "Enter."
2. Look for Bungie folder and open all the folders inside till you find 2 or 3 files called cvars.
3. Delete all the cvars files in that location. Don't close that folder window yet.
4. Open Destiny 2.
5. Change all the video settings you want to change, click apply and then close the game.
6. In the same folder where you deleted all the cvars files in step 3 you now need to delete the file that says cvars.old and cvars.tmp (if there's one). Do not delete cvars.xml file.
7. Open/Edit cvars.xml file. (I recommend using Notepad++)
8. Now look for these 2 settings and change the value as described below. (Do not skip changing the value of these 2 settings or it won't work)
cvar name="force_auto_detect" value="8"
to
cvar name="force_auto_detect" value="0"
and
cvar name="mouse_smoothing_mode" value="8"
to
cvar name="mouse_smoothing_mode" value="0"
9. Save it and close the editor you were using.
10. Now right click in the cvars.xml file and click Copy. Now paste it in the same folder 2 times. It will look something like this cvars - Copy.xml and cvars - Copy (2).xml.
11. Now for this step you need to make sure that you can see file extensions/file type or else you won't be able to change their file extension/type. If you don't know how to then go here: http://kb.winzip.com/kb/entry/26/ You want to change the name of the 2 new files you just pasted into cvars.tmp and cvar.old so it will look something like this: https://i.imgur.com/wqlCQhi.png
12. Now select all 3 files and right click and click properties. Check Read-Only and click apply and then ok.
13. Open Destiny 2 and you shall have all the settings you have selected previously. Enjoy!
When Bungie fixes this issue you want to revert 1 setting on all 3 files, you want to uncheck Read-Only. Select all 3 files(cvars.xml cvars.old cvars.tmp), right click, properties, uncheck Read-Only, apply, ok.