I have set the option in ACP for "show user profiles" to the Usergroup of "Registered Members" only.
Then when accessing the user-interface as a user at:
Profile > Settings > Privacy > Edit your Contact Details >
it still shows:
"View your Identities" > "All visitors"
So although user-profiles are not visible to "Visitors", the user is able to select "All Visitors".
Same goes for "Identities", even when all "Identity-fields" are deleted by Admin in ACP.
Same goes for other stuff, e.g. "People Who may...." - "Receive your Newsfeed" > "Visitors".
Generally speaking, I think it would be easier for the user if "Privacy Settings" could be applied directly towards each section e.g. "Contact Details" or "Personal Details".
Similar as FB is having it.