When transmission.conf is empty a set of default, working, configuration file is created by the transmission initscript. The Alt-F Transmission webUI should be used for the first time to specify the Transmission folder (where Downloads, Finish and Inprogress folders are properly setup)
-when you have to edit Transmission settings you should edit /etc/transmission/transmission.conf, not /var/lib/transmission/settings.json, which must be a a symbolic link link to the real conf file
-you should not edit the conf file while Transmission is running
-you should use the Alt-F webUI for the initial Transmission setup, to create a default conf file
-you should do most customizations using the Transmission webUI, where that is possible, just search for on how to do that on its own webUI.
-when Transmission is started through its init script, some checks are done and enforced, by modifying the conf file:
-- the local network must exists in the rpc-whitelist key; if you have to add some, add it to the list end, coma separated, following the pattern.
--if the settings.json link to transmission.conf link does not exists, it will be created
--some additional checks/enforcements are done at the conf file.
Alt-F strength is its simple webUI, that covers most users needs. Use it first, verify that it's working, then use the command line if needed to costumize. But when using the command line you must know wheat you are doing!
To keep Alt-F sane always use its services initscripts, e.g., 'rctransmission start|stop|status|enable|disable|..."; as a rule of thumb all services have a rc<servicename> initscript.