You created an SObject variable. This isn't what you needed. Instead, go to the Resources tab on the left palette, create a new Formula, and use the appropriate formula you're looking for (e.g. $Setup.SetFieldFeatureFlagFromCustomSetting__c.IsActive__c). Then, in your assignment area, reference the formula:

{!VariableNameToSet} equals {!FormulaNameForCustomSetting}

You created an SObject variable. This isn't what you needed. Instead, go to the Resources tab on the left palette, create a new Formula, and use the appropriate formula you're looking for (e.g. $Setup.SetFieldFeatureFlagFromCustomSetting__c.IsActive__c). Then, in your assignment area, reference the formula:

{!VariableNameToSet} equals {!FormulaNameForCustomSetting}

Or, you can use that formula directly as a criteria in a Choice. The other variable isn't necessary in this case.