Setting Automatically checkout on Asset Modification in the editor does not check out files

When the checkbox for Automatically checkout on Asset Modification is set to true in the editor, updating files (blueprints, materials, etc) does not check them out automatically.

REGRESSION

Working CL: 2707645 (4.9.2 binary)
Broken CL: 2758231 (4.10 binary)

1. Open UE4Editor
2. Connect Project to source control
3. Create a blueprint based on actor
4. Make sure that no edits are pending and that the BP is checked in
5. In Editor Preferences-> Loading and Saving, check the box for Automatically checkout on Asset Modification
6. Open the blueprint and create a Print node.

Result:
The blueprint is not marked with the red "checked out" checkmark in the content browser.

How does one disallow edits when the asset is not checked-out