Users Outlook Availability Being Read With Default Scheduling Policy 'Off'

We are seeing that the staff member's Outlook availability is affecting service availability even if in the service the "Default Scheduling Policy" is set to off.

The only way to avoid this is to turn off the staff members "Events on Office calendar affect availability". 

In past experiences when the Default Scheduling Policy is off, the staff member's availability wouldn't be read and it would be based off the service's schedule (maybe I'm remembering incorrectly). Anyone else seeing this issue?