My testing today has shown that turning that option off does prevent Windows Updates from installing the latest BIOS update.  On one laptop with version 1.9.0, Windows Update had the 1.11.1 BIOS in the pending download list.  I quickly rebooted the laptop and turned off the BIOS option for "UEFI Capsule Firmware Updates".  After rebooting the laptop, Windows Updates no longer listed the update for 1.11.1.  As a side note, Dell just released version 1.12.0 yesterday (4/12/22).  Upon applying this version manually, it still changes the SATA back to RAID.  So, ultimately, the problem still exists but the laptops should not get the BIOS updates unless ran manually.  
We have 85 Dell Inspiron 7506 2n1 laptops deployed with our custom school image.  The storage is set to AHCI instead of the default RAID setting in order to image our laptops.  The automatic Dell/Windows update to BIOS version 1.9.0 is reverting the storage setting back to RAID.  This is causing the laptops not to boot.  We are having to physically touch every laptop after the update gets applied to change this back!  Unacceptable!  
Inspiron 7506 2n1 BIOS 1.9.0 Reverting Storage Back to RAID