5
Thanks guys. I figured it out.
The column 'umode' from xoops_users table controls that. And this value is configurable from "User Menu".
The default value when some user is newly created gets controlled by line:200 of register.php
$newuser->setVar('umode',$xoopsConfig['com_mode']);
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To get flat view for all user execute SQL
update xoops_users set umode = 'flat'
and for new users getting 'flat' as default value, user "Admin Panel" and Preferences >> Generals - and set flat as comment order. This will be copied to any new user's setting.