Not Allowing Open Registration Allows Open Registration?

I have set the Allow Open Registration parameter to NO.

However, the login page shows a link to the registration page -

When that register link is clicked, it brings up a registration page -

When someone fills out that registration page, it allows registration at level 0. What other things may be affecting this, so I can eliminate open registration?

However, the login page shows a link to the registration page -

When that register link is clicked, it brings up a registration page -

When someone fills out that registration page, it allows registration at level 0. What other things may be affecting this, so I can eliminate open registration?