Well... Yes and No... If the box is unchecked, the changes are being stored in the catalogue file... which doesn't explain why you're NOT seeing the changes to the original files.
Do a test... Load LR with the settings the way they are. Make a change to a NEF file... make a significant change, this is just for test purposes... You don't have to "save" anything. LR is supposed to do that automatically.
Exit/Close LR...
Restart LR... and check to see that the change is there... It should be... If not, we'll have to find out why not. You say you've made changes to other files, and they're not being reflected... so something is wrong...
Something else you can do is look for the original files. Pick one. If the box is checked, there should be 2 files with the same file name in the same folder... One with a .NEF extension and one with an .XMP extension.... You can check the preference box, and do the same test as above to see that LR is indeed creating XMP files like it should...
Remember, you'll need to exit LR after you make any changes to the preferences tab because those changes don't get reflected until you exit, and re-load LR...
