The Settings opened by clicking the notification are the Per Project settings, and those are not what you need in this case.
To fix this, go to
File->Other Settings->Default Settings- Expand
Build, Execution, Deployment - Expand
Compiler - In
Annotation ProcessorscheckEnable annotation processing - You may need to re-open the project to get the settings to take effect.
- Enjoy
For complete reference – screenshot with appropriate settings screen:
