Last tested: Aug 29, 2018
Yes - it is disabled by default.
Looker email/password logins are always disabled for regular users when SAML Auth is enabled. This option allows alternate email-based login via /login/email for admins and for specified users with the login_special_email permission.
Turning this option ON is useful as a fallback during SAML Auth setup should SAML config problems occur later, or if you need to support some users who do not have accounts in your SAML directory.