diff --git a/python_modules/dagster/dagster/core/host_representation/handle.py b/python_modules/dagster/dagster/core/host_representation/handle.py
--- a/python_modules/dagster/dagster/core/host_representation/handle.py
+++ b/python_modules/dagster/dagster/core/host_representation/handle.py
@@ -64,9 +64,9 @@
 
     opt_in_settings = instance.get_settings("opt_in")
     return (
-        UserProcessApi.GRPC
-        if (opt_in_settings and opt_in_settings["local_servers"])
-        else UserProcessApi.CLI
+        UserProcessApi.CLI
+        if (opt_in_settings and not opt_in_settings["local_servers"])
+        else UserProcessApi.GRPC
     )
 
 
diff --git a/python_modules/dagster/dagster/core/host_representation/repository_location.py b/python_modules/dagster/dagster/core/host_representation/repository_location.py
--- a/python_modules/dagster/dagster/core/host_representation/repository_location.py
+++ b/python_modules/dagster/dagster/core/host_representation/repository_location.py
@@ -495,7 +495,9 @@
         step_keys_to_execute,
         retries=None,
     ):
-        raise NotImplementedError("execute_plan is not implemented for grpc servers")
+        raise NotImplementedError(
+            "execute_plan is not supported for out-of-process repository locations."
+        )
 
     def execute_pipeline(
         self, instance, external_pipeline, pipeline_run,
diff --git a/python_modules/dagster/dagster/core/instance/config.py b/python_modules/dagster/dagster/core/instance/config.py
--- a/python_modules/dagster/dagster/core/instance/config.py
+++ b/python_modules/dagster/dagster/core/instance/config.py
@@ -53,6 +53,6 @@
         "schedule_storage": config_field_for_configurable_class(),
         "scheduler": config_field_for_configurable_class(),
         "run_launcher": config_field_for_configurable_class(),
-        "telemetry": Field({"enabled": Field(Bool, default_value=True, is_required=False)}),
-        "opt_in": Field({"local_servers": Field(Bool, default_value=False, is_required=False)}),
+        "telemetry": Field({"enabled": Field(Bool, is_required=False)}),
+        "opt_in": Field({"local_servers": Field(Bool, is_required=False)}),
     }
diff --git a/python_modules/dagster/dagster_tests/core_tests/instance_tests/test_instance.py b/python_modules/dagster/dagster_tests/core_tests/instance_tests/test_instance.py
--- a/python_modules/dagster/dagster_tests/core_tests/instance_tests/test_instance.py
+++ b/python_modules/dagster/dagster_tests/core_tests/instance_tests/test_instance.py
@@ -5,6 +5,10 @@
 from dagster import PipelineDefinition, check, execute_pipeline, pipeline, solid
 from dagster.core.errors import DagsterInvariantViolationError
 from dagster.core.execution.api import create_execution_plan
+from dagster.core.host_representation.handle import (
+    UserProcessApi,
+    python_user_process_api_from_instance,
+)
 from dagster.core.instance import DagsterInstance, _dagster_home
 from dagster.core.snap import (
     create_execution_plan_snapshot_id,
@@ -151,3 +155,18 @@
             ),
         ):
             _dagster_home()
+
+
+def test_default_user_process_api():
+    with instance_for_test() as instance:
+        assert python_user_process_api_from_instance(instance) == UserProcessApi.GRPC
+
+
+def test_manually_set_grpc_instance():
+    with instance_for_test(overrides={"opt_in": {"local_servers": True}}) as instance:
+        assert python_user_process_api_from_instance(instance) == UserProcessApi.GRPC
+
+
+def test_manually_set_cli_api_instance():
+    with instance_for_test(overrides={"opt_in": {"local_servers": False}}) as instance:
+        assert python_user_process_api_from_instance(instance) == UserProcessApi.CLI
diff --git a/python_modules/dagster/dagster_tests/scheduler_tests/test_scheduler_run.py b/python_modules/dagster/dagster_tests/scheduler_tests/test_scheduler_run.py
--- a/python_modules/dagster/dagster_tests/scheduler_tests/test_scheduler_run.py
+++ b/python_modules/dagster/dagster_tests/scheduler_tests/test_scheduler_run.py
@@ -242,7 +242,10 @@
 @contextmanager
 def default_repo():
     loadable_target_origin = LoadableTargetOrigin(
-        executable_path=sys.executable, python_file=__file__, attribute="the_repo",
+        executable_path=sys.executable,
+        python_file=__file__,
+        attribute="the_repo",
+        working_directory=os.getcwd(),
     )
 
     with RepositoryLocationHandle.create_python_env_location(