Yup, those are both places where this setting suppresses the content 
Indeed, this site setting is just a bit of extra friction to prevent accidental access in the most common places. It does not cover all parts of the UI, and it is not considered a security feature.
Admins having full access to all content is very deeply-engrained in Discourse’s source code. Changing that will not be trivial.
In its current form, it is not a security feature, so restricting it to the console wouldn’t make a difference to security either way.
I realise you are both asking for a more fully-fledged version of this feature, which is a completely valid request. It might be something we do in future, but I’m afraid we don’t have any plans to prioritise it in the near-term.