It is correct in the sense that you literally cannot use this option with the binary engine, but I've fixed it not failing sooner.
Enabling bUseLoggingInShipping for a project prevents the project from being built for Shipping if the project includes replicated properties. This is only an issue with binary builds of the Engine. If the Engine was built from source code, the project will successfully build for Shipping.
The build fails with the following linker error:
The build completes successfully.
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-56418 in the post.