So this is a little confusing, and the latest manual that will come out just after Osh improves the description. We could further clarify it by changing the top bar's CWS-CWS indication on initial engagement to something else, because it's a bit of a misnomer. The short story:
When you press/hold to engage the AP when it isn't already engaged: The "CWS" rules in setup are ignored. This case is the same as pushing the individual mode buttons in the menu to activate the AP. Therefore, the SYNC button setting is observed, if it applies (does not apply if you're in NAV mode, essentially, because there's no bug to syn)
When the AP is already engaged and you press/hold the CWS button to temporarily override it, THEN the option you chose from in the AP setup menu is observed.
So really, there is a "hold to engage" function of the disconnect switch, and there's a "control wheel steering" function, and they're both slightly different, but unfortunately annunciated the same way.
Hope this clears it up, though!