There is no something wrong with it, because when you create a new ticket, the Priority does not appear on the form, indeed.
This priority has the relationship with Help Topic (see help_topic table, you can find that there is "priority_id" field in it). If you want to modify the default priority for the Help Topic, then you have to change it from Admin Panel -> Help Topic.
If you want to implement Help Topic instead of Department selection while creating a new ticket, you can use this MOD:
http://www.osticket.com/forums/showthread.php?t=2023(http://www.osticket.com/forums/showthread.php?t=2023)
Best regards,
Masino Sinaga