We have fixed this in Beta2 in other way than the suggested one:

if you open the No Variants, you can select some variants. If you unselect them all, you are again in No variants.

It means we treat No variants as all variants.

It does not make sense to have all variants selected, these selection boxes usually works in a way that you select what you want and not what you don't want.

We could rename the empty state to All Variants though.