By default BP allows messaging between *all* users, not just friends. However, the popup list (autocomplete) will only be populated with your friends. Kleo doesnt override that.
The command that you mentioned is to use when you want the autocomplete list to search all members, if set to true. It doesnt do any blocking of message sending based on friendships. There is no need to use it with Kleo if you only want friends to be displayed. (https://buddypress.org/support/topic/resolved-recipients-list-when-friend-connections-is-not-checked/)
Note: I tested all of this with 2 different themes besides Kleo before I responded, including the WP 2015 Theme.
I believe (though I’ve never used one) that there are plugins available that will stop members from messaging other members that aren’t their friend.
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