This seems a bug. It was always the case but according to the release notes they tried to fix it. There was another attempt in the latest Early Access, but alas there might be more than one cause as it’s still not completely fixed (although for me it’s at least much improved). Under investigation here in EA:
It seems to me that it’s redundant now. In the past, it was a way to avoid too many annoying „you are offline“ notifications by telling ARC „yeah I know I’m offline“.
However, the notification behavior has much improved and so I don’t think that engaging the switch actually makes much difference anymore.