CB 2.x Login Redirect problem

For me and on the demo site it only works if that parameter is enabled. I don't know why it works in reverse for you.

Okay, I appreciate that the "solution" may make no technical sense. Perhaps it is an issue related to our template - the FAQ on the page we found the solution said something about template messages. Our template was custom built in a tool called Artisteer

Regardless of whether this should work, shouldn't work, does work, or doesn't work, what is the proper CB way to solve this original issue?

I don't have a proper way to solve it as it's an issue isolated to your site or even template as you said, but I find it hard to believe a template would alter the routing behavior unless it's an API library that's a part of the template doing it. If it works fine disabling that then just leave it disabled.