After the Java Executable option is filled out, turning it off (to make it default to the bundled executable) is ineffective and the game is still launched with the custom executable.
I've found it easy to demonstrate the issue by turning on the option, setting the field to an invalid path, then turning it off and attempting to launch the game.
I think the option to turn off the custom executable should either reset the field or keep the custom path but use the bundled path thus allowing the user to re-enable the feature using the previously set custom java-executable.
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With the Java executable input field set to the bundled jre (installed onto my D drive, not C in case that matters) the game loads that bundled jre if the switch is on or off.
Have you tried keeping the slider on but telling it to use the bundled exuctable?
Default bundled-path: C:\Program Files (x86)\Minecraft\runtime\jre-x64\1.8.0_25\bin\Java