It's supposed to prevent pieces of a luminaire from casting shadows wrt the light source in that luminaire. Make sure your entire luminaire (any light sources and additional geometry) is inside a block. If it's still not working, put together a simple example. This stuff has not been tested extensively.
I'm having the same problem with a pendant fixture. Not only can't I stop the parts from casting shadows, the whole thing insists on glowing... even though glow is not checked.
You'll need to re-create the block-- tag only the light source object as a light and tag the other parts as non-shadow-casters as appropriate. When you insert the thing as a block it should show up as a luminaire and should behave correctly. Send a simple example if you can't get it to work.
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