Submodules are updated even if "Check submodules before commit & push" option is off

I am re-reporting this issue as I am experiencing a different use case which is preventing me from using the product at all. Since the application automatically pulls on submodules, I can't avoid trying to pull a submodule that exists in a private repo that I do not have access to. This seems like a strange case, but I am working with a client that has some additional tools that are only available for some. Here's the output...

git -c diff.mnemonicprefix=false -c core.quotepath=false fetch origin

git -c diff.mnemonicprefix=false -c core.quotepath=false pull --rebase origin development
From https://github.com/FooProject/FooRepo

• branch development -> FETCH_HEAD

Current branch development is up to date.

git -c diff.mnemonicprefix=false -c core.quotepath=false submodule update --init --recursive
fatal: Not a git repository: ../.git/modules/tools

Completed with errors, see above.

Below is the original issue as reported.

Set the option "Check submodules before commit & push" to off.

Then checkout to an arbitrary local branch
While checking out, click on "Show full output".
The output I see is

git -c diff.mnemonicprefix=false -c core.quotepath=false checkout master
M src/BunnyTail/BunnyTail.csproj
M src/BunnyTail/Program.cs
M src/BunnyTail/packages.config

Already on 'master'

git -c diff.mnemonicprefix=false -c core.quotepath=false submodule update --init --recursive
Completed successfully.

That is, a git submodule update is performed.
Is it correct?