Correct on all....and I still use preseason.
It makes the CPU controlled-players more potent. Think of it this way, 0 fatigue is like having fatigue off. So, if you don't fatigue, then you can run hard, try to break tackles, etc. Now, by setting this in the Main Menu only, we still get the fatigue loss in the franchise, but they run harder and are more aggressive (particularly on offense). It basically helps balance-out the offense/defense.