If I had never owned a Newton MessagePad 2100, I might never have known how good handwriting recognition could be, or how one can capture handwriting without converting it to text.
Turning off Scribble in iPadOS Apple Stylus settings certainly does prevent the conversion of handwriting into text. It eliminates handwriting with an Apple Stylus. Someone at Apple did not think this through, so their documentation gives hope where it does not exist.
You should send feedback to the iPad Product team as there is no feedback for the Apple Stylus or iPadOS. Make it a feature request to provide a setting so that handwriting can be captured but not converted to text.
Tested: Pages v14.1, Apple Stylus Pro, M4 iPad Pro with iOS 17.6.1.