Actually the information in the drop down help does NOT mention that this question should be answered yes only by those who are/were either crown servants, in the military or a family member of such people. Rather it instructs that the crown service form is only for such individuals.
9.c. is obviously one of the several poorly worded items in the new form.
I doubt checking "no" will be a problem even though the applicant lived outside Canada during the eligibility period, so long as the applicant otherwise completely and accurately provides that information in the presence calculator and address history. Better, perhaps, to explain (briefly stating that the crown service form is Not Applicable) on a supplemental page included with the application. But as it is currently phrased in the form, anyone who has lived outside Canada during the five years prior to applying is instructed to respond "yes" to item 9.c.
As I have observed elsewhere, I believe that IRCC will approach many of these questions and items with a lot of flexibility, that as long as the applicant has provided the key information in a way that reasonably responds to what is requested and is otherwise complete and not misleading, IRCC will almost certainly be liberal in how it approaches the many vague, ambiguous, or otherwise problematic items in the form. Of course there are many parts of the form for which there are definite ways in which the applicant should respond, and errors in respect to these will be problematic in proportion to the nature and scope of the respective error. But for items like 9.c., item 6, among others, IRCC will most likely work with various approaches to how those are answered, again so long as otherwise the applicant has reasonably responded and provided the key information.