From what I can see, when you enable it, it bugs the pets and makes them appear in first person even if you disable it. some part of that code for that setting seems to stay the same even if you disable it.
I have even tried removing the setting files so they reset. It did not fix the problem.
Currently I have not found a way fix this problem. I will post it here if I do.
I checked trello and for the update 0.9.0.4 they have added a bug fix for this problem, its still in the works but should be out in the next hotfix. Good job Devs 
Was thinking about creating a new bug report, yet thought I would post it in here also, due to it being pretty similar and it might be fixed already in the new hotfix. Yet ignoring the first person legs or not, in the video I will link below, when you go from a new room, your pets/other items (Ex: Survivors Shield) equipped appear again when in first person, also when teleporting to a different locations around the plaza causes this issue too. I believe its whenever you move to a new part of the map, it becomes a little annoying, especially when teleporting to the minigame pad and then being blinded by your pets. Hopefully this made sense with the video, and hopefully this might already be fixed in the hotfix!
Video: https://youtu.be/jITIxJbzTN8
The hotfix update has come out and I can confirm that this bug has not been fixed.
What are the steps to reproduce this? I am not able to get it to happen.
You enable the first person legs then disable it. Your pets and even sometimes your accessories will appear while in first person even if you’ve disabled first person legs.
So far it is permanent, even restarting the game does not correct it.
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