Yes, in crystal you always need to handle the NULL conditon first.
If you start with the other condition and it hits a null it stops evaluating on that condition and never gets to the OR.
Depending on your version you can , in the formula editor there is a toggle option to use either 'Exceptions for Nulls' or 'Default values for nulls' .
You can flip that to use the defualt values for only that formula versus teh overall report set up to use default values all the time.