@tchncs @kzimmermann Actually now that I look at it, it might not be possible to overwrite that value from config.php (it's been a while since I did an install!)

Basically, there are different "site profiles" you can choose from when installing ( ex: SingleuserSite, CommunitySite, PrivateSite, PublicSite ).
And depending on what you choose, you'll get different features/plugins/options.

The "localonly" configuration is only set to 'false' for instances that use the "Public" site profile.

You can have a look at these for an idea of what the differences are:
Default settings: https://git.gnu.io/gnu/gnu-social/blob/master/lib/default.php
Site profile settings (overwrites some defaults): https://git.gnu.io/gnu/gnu-social/blob/master/lib/siteprofile.php