I finally figured out how to edit privacy settings for "Windows Phone" now that it no longer shows up under Account Settings > Apps. The trick is it still shows up under Bookmarks (
https://www.facebook.com/#!/bookmarks/apps), accessible from Home, then hover over APPS in left navigation bar and click MORE. Click the Edit icon next to Windows Phone (which erreonously says "Remove" when you hover over it). The settings for this device show up, and you can change the visibility for posts. After fixing this, I removed the Windows Phone app completely and everything still works fine which makes sense because Windows phone shouldn't be using app settings any more in the first place, which is the root of this issue. It seems FB only partially removed the app, since it doesn't show up under Account Settings > Apps, but still showed up under Bookmarks. Still a bug, but at least there is a workaround. However, Facebook for Windows Phone (the standalong app) still defaults to "Only Me" and unlike Windows Phone FB app doesn't show up under Bookmarks. It likely has the same underlying issue, but in the mean time you can at least change the visibility on each post -- just can't change the default setting.