When I click on that, it brings up three choices. Word, Search the Microsoft Store, or choose another app. Clicking on "choose another app" asks if I want to keep using this app (Word is highlighted), or look for more apps. Oh yeah, before I click on "choose another app", I do see a box on the screen that can be checked, which says "Always use this app to open rtf files. I assume once I choose WordPad, I will want to check that box.
Anyway, when I clicked on "more apps", Notepad, Windows Media Player, and WordPad were the first three choices that come up.
Does all of this sound like what you described as what I would hope to expect. If so, I may go ahead and take a deep breath, click on WordPad, and try this out. At this point I guess I don't have a lot to lose.
Give er a try.
If the .rtf files open in Wordpad after you try it a few times, then go ahead and set Wordpad as the default.
The only real risk is if you have .rtf (rich text format) files somewhere that have formatting unrecognizable to Wordpad