That's just turning off chat history, which is confusingly also referred to as "off the record". Usually when people talk about OTR for chat, they mean client-to-client encryption, so not even the chat provider knows what the content of the chats were, analogous to using something like PGP for email.

The option is still there on a chat-per-chat basis but they removed the "Turn history off by default" setting.

Edit: Actually, I don't know that "turn history off" does the same thing as that option, they just seem the same.