I can confirm it (sort of).
There are two theme settings:
1) Allow users to add a picture to their profile
2) Show user's profile pictures in their posts
After experimentation:
The first one determines whether or not users can add pictures. It also seems to determine whether or not existing pictures are displayed when viewing a profile.
The second one determines whether or not users can
change their my-home setting which controls whether pictures are displayed in posts. It doesn't affect the existing my-home setting.
I don't know whether this is a bug, or if it's supposed to work this way.
But ....
On my board, I want to turn off users' ability to add pictures themselves, but give them the option of whether to view the pictures. I will add pictures manually, on request. The current behavior makes this easy to do, so I hope that aspect of the behavior doesn't change.
