I think I have it. This setting does not really disable the ring with a small exception that I'll get to.
This setting does not affect the AF switch setting like I thought it did. What it does is affect the MO (manual override) switch setting. With the MO lens switch on, things happen. If the software setting is full time MF ON, the slider comes into play. It produces a dead zone, the ring must be turned a small amount before the focus can be manually changed. Even on 15, its not a great amount that you need to turn it, but it is a noticeable delay. But the delay only shows while af-c is actively focusing. If your camera is just sitting there with no focus activity, turning the ring has an instant affect.
Now if you set the software to full time MF OFF (lens switch still on MO), then the ring will not override, BUT only while af-c is actively focusing. It behaves just like if the lens switch is in the AF position. It never disengages, it just feels like the switch is in AF position and the camera fights and instantly corrects. Let the camera sit with focusing inactive and the ring will go back to having an instant affect.
I am testing this in af-c with bbf and holding the bb on. Sigma 150-600 C with d7200.
Now that I think I understand this, I wish the slider setting worked while the camera is inactive. I don't worry much about the manual focus ring except when I shoot on the tripod. I'll bbf and release the button and take my shot. maybe recompose. During that time, I could hit the manual ring. Since the camera is not active, hitting the ring will have an instant affect on focus regardless of switch or software setting.