I'm using ArcGIS 10.1 but I do not have administrative privileges. Nothing changes when I check or uncheck the box using the Advanced ArcMap Setting utility. When the data frame is rotated, the point symbols are not rotating.
When an administrator logged into my machine, we tested the same scenario. Checking or unchecking the box in the Advanced ArcMap Setting utility doesn't do anything. When the data frame is rotated, the point symbols are not rotating.