First, major congrats to the RF engineers at Edge Wireless for thinking this through to a site and sector solution, and then passing on the info to the authorities. I'm reminded by this (sad ending) story that pinging and plotting was the same method used by L.A. Cellular to help the police find O.J. Simpson when he was making his way south with Al in the Bronco (and the wig and money) to points unknown. jlk
Any network (CDMA or GSM) has to have some kind of location update to know where you are in the network. If it doesn't then it won't give you access to the network. So yes, I would say it's a "bogus" setting.
What that settings really means is that programs running on your phone will not have access to GPS, and it will only be actively used for 911.
If you know the approximate distance from the tower, even one tower, you can cross reference that to likely locations on roads. In rural areas like SW Oregon in the coastal range, there are only so many roads. You would not get a precise location, but you would get some general vicinities on the roads to search.