'Bugs are managed with tasks' still uses 'Requirements' states

In DevOps there is a setting to configure whether 'Bugs are managed with requirements' (Requirement Backlog Level) or 'Bugs are managed with tasks' (Iteration Backlog level).  However, if you select 'Bugs are managed with tasks' - the bugs still have the Requirement states.

We're using the Scrum template so the Production Backlog Item states are New, Approved, Committed, Done and the Task states are To Do, In Progress and Done.

For a Bug on the iteration board, the task states make a lot more sense than the Product Backlog Item states.

I know you can change the columns on the board but if you don't have permission to edit the template (or you are using the default template) - there is no way to change the status names for the bugs.

I could have sworn that changing the setting 'Bugs are managed with tasks' - used the make the bugs work just like tasks (including their statuses).  Have I imagined this?  Is there no way to fix it without editing the template? 

We're trying to avoid editing the template as we want to use the 'default' Microsoft process as much as possible and we have a lot of old projects we want to migrate to the new template.