The setting you're mentioning i.e., Apple ID > Find My: Disable everything^1^ has superscript i.e., ^1^ attached to it. The superscript leads to the following note:
^1^: Some people prefer to leave “Find My iPhone” enabled as it allows them to remotely wipe the device if it gets lost. However, due to enabling the “Erase Data” setting, I don’t believe this is necessary. If it makes you feel better or if you have a specific use case for it, you can leave this feature on, but “Share My Location” should still be disabled (unless you use need to use it often) as this feature will report your location back to Apple regularly.
I'm not the writer of the article, but I think that this note makes it clear that you can configure this setting according to your threat model.