Every player seems to have an attribute that tells what type of player he is. So far, the unique types I have found are:
Standard: Players in the default roster
Created: Players created through the in-game C-A-P.
Historic: Players on the classic teams.
Generated: Draft class players.
Retiring: Players that are retiring.
NOTE: I made up that names as in the save they are just unique numbers.
The check box is not valid for historic teams since it doesn't really map to "Last Name Only". What is really does is allow you to make a "Standard" player into a "Created" player. "Created" players only have the last name said when you create them in game even if the first and last name match an existing PBP name.
I believe that Historic Players and Draft Class players only have the last name said by default as well. The checkbox doesn't show for those types because the game is expecting those players to be of "Historic" type and "Generated" type and things go awry when they are not.
Hope this clears things up.