Include Develop settings in metadata inside JPEG, TIFF, and PSD files ignored when unchecked

In the Catalog Settings under the Metadata tab, I have unchecked the option 'Include Develop settings in metadata inside JPEG, TIFF and PSD files'.
I then selected a JPEG photograph in the Library module and chose Metadata/Save Metatdata to File.  I wanted to save the metadata that I had added (keywords, IPTC, rating, etc), but not the develop settings.
I then imported the jpeg back into another catalog.  The metadata I had added was there as expected, but so are the develop settings.  This I did not expect or want.
Have I got something wrong here?  My understanding is that turning off the 'Include Develop settings in metadata inside JPEG, TIFF and PSD files' option means that develop settings are not written to the xmp area in non raw files such as jpegs.
Looks like a bug to me.
Tony

Hello all,
I have investigated this problem further and now have the answer.  It is not that the option "Include Develop settings in metadata inside JPEG, TIFF, and PSD files" is ignored, but it appears that the LR catalog is not properly updated when this option is turned off.
Here are steps to test and illustrate the problem:
1. Create a new folder and place a copy of an original jpeg image (original from camera) in the new folder.  Make sure you keep the original safe and only work on copies.
2. Create a new catalog in Lightroom 2.3.
3. Import the jpeg image from the new folder.
4. Add some metadata (keywords, ratings, title, caption, IPTC data, etc).
5. Make some Develop adjustments to the image.
6. Open "Catalogue Settings" from the Edit menu and check (enable) the option "Include Develop settings in metadata inside JPEG, TIFF, and PSD files".  Uncheck (disable)  the "Automatically write changes into XMP" option.
7. Select "Save Metadata to File".
8. Delete the jpeg image from the Library module, then re-import it.
9. Copy the original image back to the new folder, replacing the updated jpeg (once again, the jpeg image now contains no metadata from Lightroom).  At this stage, Lightroom fails to recognize that the metadata in the LR catalog doesn’t match the metadata content in the jpeg file.  I would have though that it should.
10. Open "Catalogue Settings" from the Edit menu and uncheck (turn off) the option "Include Develop settings in metadata inside JPEG, TIFF, and PSD files".
11. Reset the Develop settings.
12. You now need to make a change to the metadata like increase or decrease the rating (otherwise LR won’t save any metadata to the jpeg file - LR is being too smart and thinks it’s already up to date, so does nothing when you do the next step).
12. Select "Save Metadata to File".
13. Delete the jpeg image from the Library module again, then re-import it again.
14. Look at the develop settings (that you specifically did not want saved within the jpeg file in step 10).
Although the Develop settings were Reset in step 11, you have ended up with the original Develop settings from step 5.  It is true that LR has not saved the reset develop settings, but it also hasn’t removed the old develop settings that are still stored in the catalog.  This must be considered a bug (oversight).  Note that it has also saved an Import snapshot as well.
For the more technically minded (and the LR developers if you are listening), the field "xmp" in the table "Adobe_AdditionalMetadata" is not updated (old camera raw settings and snapshot settings are left behind) when the "Include Develop settings in metadata inside JPEG, TIFF, and PSD files" option is unchecked (disabled) and it seems that this is the data that is written to the jpeg file when you select "Save Metadata to File".  Note that the state of "Automatically write changes into XMP" has not effect on this process - I tried it on and off.
Hope that this might be of some help to others one day.
Tony

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