Did this previously work?
As stated in the Preferences the default programs are used when a file type does not already have a system file association.
Typically .txt files already have a system file association so to use a custom program you need to create an override by adding a new File Association entry.
From the main menu > Options > File Associations
Add a new entry and add *.txt and select the program to use for view/edit and then click the OK button to add the entry.
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