objectSettings is defined in the Scratch Org Definition File, which applies when creating a new org via sfdx force:org:create
.
These sharing settings are likely not applied when deploying code to your existing scratch org. If you want to include sharing settings in your deploy process, you could add a custom metadata definition file(s) that overrides the standard Lead object to an unpackaged directory in your project and deploy them.
Sharing Settings can be changed via the sharingModel and externalSharingModel attributes.
For example,
<?xml version="1.0" encoding="UTF-8"?>
<CustomObject xmlns="http://soap.sforce.com/2006/04/metadata">
<deploymentStatus>Deployed</deploymentStatus>
<label>Lead</label>
<pluralLabel>Leads</pluralLabel>
<sharingModel>Read</sharingModel>
<externalSharingModel>Private</externalSharingModel>
</CustomObject>