Yes, that's it. It affect everything which can be slowed by the "slow" HDDs transfer rate and indeed, NPC's variety. On HDDs, the game wasn't able to load a bunch of NPC "types" fast enough, and by consequence have to spawn several of the same. But the option shouldn't be here I guess, knowning that a SSD is now required since 2.0.
You moved far enough when loading a save ? (just to be sure the game "respawned" new NPCs)
If you don't use mods, you can report it directly to the support if you want ("contact us" button).
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