When choose from the list box the same Notification as the Inherit (In this case 24x7Mail). This monitored Item will not follow the Inherit System Notifications Setting,
The application will keep following the template 24X7Mail, even if you change the "Default Notification Setting" as you have configured via the Groups Receives Notifications for this Agent you are working on. So if you change the Default Notification to 24x7All, the Notification Template for this item will look like:
In the Normal User Menu, you will see in the first total tables of monitored items also the selected Notification, like All Files.
First screen shot the Default Notifications Settings of this is 24for7SMS (inherit), both directories will notify using the 24for7SMS notification template.
As you will see in the next screen shot the Default Notifications Settings of this server has changed to Gold. The management directory will take over these notification template because it inherits, but the personeldata will keep using the 24for7SMS notification template.