All that checkbox does is make STS communicate with LFDS over HTTPS on port 5049. You can easily bind an appropriate certificate (valid for the LFDS FQDN hostname value set in STSEndpointUtility) in the LFDS XmlEndpointUtility. During install/upgrade, I believe STS will preferentially select the secure default of the HTTPS option. If you have LFDS and STS on the same machine and aren't concerned with encrypting localhost traffic (which to be clear is still happening over HTTP/S), uncheck "Use SSL" in the STSEndpointUtility during install/upgrade.
I'm not personally aware of any open bug where STS sets this option of its own accord, without user interaction, outside the install/upgrade scenarios outlined above. If you are, please let me know the bug or support case # and I'd be happy to follow up.
Re:
Most of these servers do not even use a secure socket layer for STS because all services are on the same system. It is impossible to setup a socket layer without a network socket.
As described above, this statement misunderstands the communication type and path in question. Checking "Use SSL" makes STS attempt to communicate with the LFDS service on port 5049 using the HTTPS protocol over TCP, secured with TLS 1.2 (and enforced X.509 certificate validation), instead of on port 5048 over HTTP. None of these elements changes depending on whether the destination IP is the local machine's or a remote one.