I admit it's a bit confusing. With the box unchecked, what you're seeing is just the first entry in the dropdown list (and greyed out as well). It would have probably been less confusing if Microsoft constructed the list with actual number of cores first, descending to 1.
Note that this is a only a BOOT option, and even if you checked the box and selected "1", you would reboot with just one processor core, but once windows is fully loaded you would see that all cores are active.
You can verify this in Task Manager > Performance > CPU (right-click on the CPU graph and change graph from Overall utilization to Logical processors).
I think the only way you could disable a processor core for the Windows session would be in BIOS or UEFI.