Here is my original investigation
At the end of the thread I posted the files and line number to start tracing, and explain in above post why this flag is useless and should default to on for spawnActor node.(as of today the source code seems to be the same these months later.
Now, if Epic can fix this and make it more intuitive, when this flag is off, if there are any collision(with the exception like spectator pawn special case.), people would expect to have nothing spawned. To make it even better, there should be a boolean return to reflect there is a collision or not.