This doesn't look right indeed.

I think the cause is in AbstractEntityPersister. In insert(Serializable id, Object[] fields, Object object, SessionImplementor session) (which is invoked when the setting is enabled) the value generation strategies are processed. But in insert(Object[] fields, Object object, SessionImplementor session) (which is invoked when the setting is disabled) the value generation strategies that's not the case.

So AFAICS either that block for the value generation processing should go into this other method as well or both should be unified (if that's feasible).