The setting on the Reading page is only for the RSS Feed. If you want to display full posts on the front page of the blog then you need to create your own full post excerpts.
On any theme with an active excerpt box below the editor box you can use this workaround to have full posts on the front page. You compose your whole post first and before you publish it you switch to the HTML (Text) editor, copy all the code, paste it into the Excerpt box below the posts editor, and publish the post. http://en.support.wordpress.com/splitting-content/excerpts/#creating-excerpts
If you do not see an excerpt box then go to screen options on the top right hand corner of your Admin page and include:
Post – Likes and Shares, Format*, Categories, Tags, Excerpt, Send Trackbacks, Discussion, Comments**, Slug, Author, Revisions, Writing Helper
P.S. On themes that do have an active excerpt function, the workaround works very well but you have to do it on every post you create.