Where is the preference set? It should be on the find dialog not just read from the config file.
Since I don't think there is a need to often turn on/off this preference, I don't think we should extend the search/replace dialog with this setting, so I choosed the way of making it a hidden preference. It can be found and easily toggled at _Edit > Preferences > Various_, so there is no need to manually edit any config files.
There has been no discussion about it applying to replace.
I don't think users which want to use this preference want a different behaviour between search/replace, so the setting applies to both of them. However, it would be no problem to make two hidden preferences if needed.
Needs to be documented in the manual (no it can't be left, it will be forgotten, answering your question from #2693).
Okay, then I will create a new PL with the second commit which updates the manual.