Checking that box will score you app lower. One blackmark generally should not be a significant show stopper for a mil guy with an otherwise good record.
However...
The mil is known to not care too much about FAA violations, in fact they probably had a good chuckle about it when they approved your accession. The airlines are another story...
The potential problem here is that this was a pretty significant and VERY intentional violation. 90% of violations which the airlines get to discuss at interviews are totally unintentional, honest mistakes (ie altitude bust on an arrival crossing restriction while distracted by a runway change). In your case when the computer sends the app to a human, they will read the explanation and they might possibly send the app back to the stack. Mil is in high demand right now, so hopefully you'll get to at least explain it face to face.
For honest mistakes, you just take responsibility, tell them what you learned, and move on.
In your case, you're going to be having a more intense conversation. I'd get some professional interview prep so you know how to address this. I'm guessing it will have to do with how your years in the mil afforded you an opportunity to mature tremendously, and reflect on your past mistake (and realize with horror how reckless your decision was). DO NOT try to defend or mitigate your decision.
Presumably you were pretty young. Hopefully you had only a PPL... the FAA and airlines hold professional pilots (pilots who hold a CPL, ATP, or CFI rating) to a higher standard than a PPL, student, or non-pilot.
I think you'll be fine in light of the retirements, but it may be a speed bump and you need to recognize how deep a crevasse you're standing next to.