As far as I can tell, that Safari Preferences : General check box is simply useless, and suggests what it cannot deliver. That's on Apple.
However, whether you have this checked or not... — if you have the Safari Preferences : Security panel : Allow Plug-ins unchecked, or checked with other PDF plug-ins deselected, the PDF will appear in-browser via the default Apple PDF plug-in.
As you mouse over the bottom of this displayed PDF document, the following panel will appear:

If you click the indicated icon, it will open the PDF in any separate application that happens to be configured in the Get Info panel's open with setting. I successfully tested this with Acrobat Reader DC, Preview, and Skim.