You're never 'safe' by toggling any switch. Opsec needs to be approached holistically and goes far beyond technology. This setting could be part of that but not the core. I would expect the people really at risk to be fully aware of this (or have people in their entourage that are). The best thing to do if you have state-sponsored adversaries is to assume your phone is being hacked.

I have seen some people in such positions and sometimes they don't even use a smartphone at all. I don't think they would be tricked into feeling 'safe' with something like this. I wonder if it will actually prevent the attack vectors used by something like Pegasus.

I think it will make a lot of people feel badass though :) Like most people that bought Phil Zimmermann's Blackphone.