In Preferences there are two settings related to MIDI Thru.
The first one is MIDI Thru Active under the MIDI page :
Sets all MIDI tracks that are record-enabled or have monitoring activated to echo incoming MIDI data, sending it back out on their respective MIDI outputs and channels. This allows you to hear the correct sound from your MIDI instrument during recording.
This one works exactly as the name suggests.
When it is enabled, the MIDI input is sent to the output, and when it is disabled, the MIDI input does not go to the output anymore.
But there’s another one, Record-Enable allows MIDI Thru, under the Record > MIDI page :
Prevents record-enabled MIDI or instrument tracks from echoing incoming MIDI data. This way record-enabled tracks to which a VST instrument is assigned do not play doubled notes.
This one acts as a second setting for when the first one is active.
When enabled, it indeed prevents the MIDI Thru to be active when only the Record-Enable button is engaged, as stated in the description.
However, the name of the setting itself is wrong, as it doesn’t allow the MIDI Thru, but instead does not allow it !
It should be renamed to “Prevent MIDI Thru while Record-Enabled”.