That server behavior can only be applied if you are using the Dreamweaver insert record server behavior.
The work around is to start of using the Dreamweaver Insert record server behavior, Then insert the Check New user name server behavior, and get that working. Then remove the Dreamweaver insert Record server behavior and replace it with the DataAssist insert record server behavior. You will need to add the following hidden form element:
<input type="hidden" name="MM_insert" value="WAATKRegistrationForm">
for the check New user name to continue working.
once the Dreamweaver Insert record behavior is removed, there will be a red exclamation mark next to the Check New user name behavior, and you will not be able to edit it. As long as the hidden form element is in place, it should still work though.