The documentation is very vague, and I'd like to update it.
More than 'internal enrolment', I think it affects any interactive enrolment plugin. Non-interactive enrolments (DB, LDAP and so on) are not affected by this.
Having a look at course/enrol.php, it checks if the enrolment plugin defines a print_entry() method. If it doesn't, Moodle prints a notice and redirects the user to the front page. Even if the notice says 'Manual enrolments are currently not enabled', both 'manual', 'paypal' and 'authorize' define print_entry() (it being the requisite to be an interactive enrolment plugin).
I'll change the help and the docs.
FYI, it came about because I wanted to advise people setting up courses using external database enrolment to set that to "no" so students not allowed to enter will simply get an error.