As you hinted, the alpha(x).txt settings (at least those, if not all where applicable) get read everytime you start SMAC (i.e. launch terran(x).exe).
As it's so easy to edit, it makes no sense that someone distributes a copy to the others.
Eventually, you can make two copies (with either setting) and switch by renaming and/or copying the files at need, but I still think that editing is even more simple.
Mind, you can even save a pbem turn halfway under one setting, flip the switch, resume the pbem (
no, you should know it's not a reload if you don't load the *same file again*...), and you'll see the new behavior applied.
If you want to enforce the no-contact rule against "cheaters", this would be of little help as you can't prevent anyway the potential cheater to edit the flag at his will.
If you want to avoid that someone contats someone else by mistake, it would be wise to use the flag as "handy support & reminder", but all you can do is to "suggest" its use.
In case you're not sure whether you legally can contact someone while you have set the flag to display all the (human!) commlinks anyway, you also have another cross-check without requiring to exit & resume the pbem:
if you can talk to someone (pre-1st council that is) you must own his frequency as a tradable asset like any tech.
Say for instance that you don't know whether you can contact Morgan: then you should attempt to offer Morgan's frequency to some other player.
Don't worry if you can't talk to *them* - it's just a test, you'll remove the test-offer before completing.
If you can offer Morgan's frequency to someone, then you own it, thus you had indeed made legal contact with him or obtained his freq somehow, and you are legally allowed to talk to him.
If you can't offer his freq to anyone, then either you don't possess it - or everyone else already does! At this point a fireproof test by flipping the flag would be advisable, if doubt persists.
Also the contacted one can mirror the check (e.g. if contact was not evident to him). Following the above example Morgan will attempt to offer your freq to someone else: if he can, he'll have proof that you could legally contact him, otherwise he'll signal and remind you that you contacted him in error...
Indeed you should know that freq are ALWAYS symmetrical - if A as B freq, then also B has A freq, and communication could be initiated both ways, by either player.
There is one more trick, which I can't be 100% sure of: without contact, nothing appears aside the leader name in the commlink menu.
With contact, the diplomatic status appears, and if no talking occurred yet, it would be listed as "informal truce" as opposed to a negotiated truce.
Don't forget that there are several ways to obtain someone else's freq, eventually not evident to him.
Contact might be hidden: using a fast moving unit (rover, probe, ship), you can "brush" the other player's unit or base (even empty) and then retreat in fungus or sail out of range unseen (that's why it's useful keeping at least one unit on sentry in every base and not all on H).
The other player might have obtained your freq by trade.
(
as they are symmetrical, if you have for instance A and B's freqs, you can only trade one of them to the other: be careful to choose to trade to the one who pays better, or yielding the best diplo-tactical advantage 
)
In SinglePlayer you can also pop AI's freqs, or steal them: I don't think this works tho with human freqs in pbems. At least, I never observed it and I still wait for someone to positively report it.
Finally, if you attack player A, and his pactmate B comes in A's assistance declaring vendetta on you, he *automatically* gains your freq as side-effect of decalring Vendetta (and you als gain his!). This resulted in an unexpected 1st council call in the first pbem organised at owo in spring '99, Aredhran's challenge, when CousLee attacked JT and JT's pactmate JAMiAM could suddenly call the 1st election, unexpectedly to cous: in the end I managed to get elected, even *by abstaining*, so I vividly recall that example
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ther's a tricky issue tho with frequencies and the "display all human commlinks" setting.
Indeed, even if you don't "contact" a human player, you can open his diplo-box and then close it, as long as you don't leave any item "on the table" - no communication will be received on the other end (indeed, that's why you HAVE to offer something, usually 0 energy, if you want to be sure that your written messages do pop-up when the other player opens his turn...).
In the diplo-box of a player you don't have contacted yet, you can gather some information that would otherwise be unaccessible to you: you can attempt to offer him all your techs.
This way you will get to know which of your techs the other human player still lacks (eventually including frequencies, pre-councils).
With the uncontacted human commlinks hidden, you would have no means to gather the same information (unless disclosed by some other player who knows it, but that's another story).
The fact is, that this is common practice, and it would be extremely difficult to convince all players that it shouldn't be done, imho, leaving alone enforcing it.
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All of the above mechanisms fin an exception for the EG (Empath Guild) owner. Indeed, the EG's effect is exactly to give you the ability of contacting others WITHOUT knowing their frequencies...
But this would carry us too far, I think I've covered your issued pretty much already...
