This is one article in the larger Troubleshooting SharePoint Alerts guide
Task, Project Task and Issues lists have a “Send e-mail when ownership is assigned” feature.
When you use Item-level Permissions and set Read Access to Only their own these emails no longer work.
It appears that when you go back to Settings > Advanced Settings the Send Email when Ownership is assigned radio is set back to No when using Read Access = Only their own.
Speculating here – I think that its because its very possible to set this up so the owner is not the assigned to person so you shouldn’t send an email to someone who shouldn’t be able to read it (and remember that when you re-assign a task an email goes out to both the old assignee and the new assignee) so rather than deal with these tricky scenario they just decided to disable it altogether.