Sad - very sad indeed.
You are not alone Heroud. There is very little I can now see about a client myself since yesterday. Settings seem to be changing for the worse everyday.
I'm not aware of this type of setting that you mentioned.
Upwork is permissive with new clients and freelancers alike, so you have to decide by yourself what you want to do:
1. You can reject ( and block the client if you want ) the invitation and then select "other" reason from the list. Politely inform the client that you rejected them because of this reason. Maybe if others will do the same, the client will understand that a verified payment method is a sign of inspiring trust among freelancers.
2. You can still discuss the project with the client, inform them about the payment method, ask for hourly contract and start working in case everything gets solved.
Not every client with an unverified payment method is a fraud. Some of these people might not know how things work around Upwork, maybe they are just testing the waters.
Basically, you have the freedom decide for yourself what to do and how to do it. Just be careful, convience the client to add a payment method and try to minimize any risk when deciding to work with a new client, which doesn't have any history.
I simply respond explaining they need to add a payment method to their account, and for them to contact me again once they have done so, and I'll then give their requirements some consideration. Most clients take the hint.