• I think you should be able to specify more than one default project -- a list rather than a single item.
• Although not all of it is consistent, we're moving toward hyphens over underscores in config. So a better name would be arc.todo.default-projects.
• Config entries should be listed in ArcanistSettings so that the "list config" commands know about them and they can be typechecked.
• Making this context sensitive seems like it might be confusing? It's a little weird to me that you pick up projects based on which directory you run arc todo in. It's also not obvious to me what the interaction between -p and defaults should be. This implements "replace defaults with flags", but maybe "add flags to defaults" is more intuitive? Generally, I'm not sure about the value of the default setting.
• For consistency, don't abbreviate the full-length flag -- --project, not --proj. The short flag is better if you don't want to type --project anyway.
• For consistency, shorten to -p instead of -P?
• Projects will have proper short names soon (see T4021) so users could do arc todo -p qa instead of arc todo -p "Quality Assurance". Maybe this feature should wait for that?

Let me know how much of that makes sense.