I remember having the discussion that Tracks > [X] Update the display while playing only affected playback and not recording. It doesn’t. It affects both. So either the action is wrong or the prompt is wrong.
It affects “transport”. That is, it affects Play, Record, Timeline Quick Play, Scrubbing, Seeking and Play at Speed.
As far as I recall it’s always been like that (though we didn’t have all of those in previous versions). It’s certainly does that in Audacity 2.0.0.
Note that it can now be turned on/off much more conveniently from the right-click Timeline menu: “Do not scroll while playing”.