Nope, IMO it doesn't work correctly.
Lets say we have recovery_target = '' in the config:
localhost/postgres=# select name, setting, setting is null, pending_restart from pg_settings where name = 'recovery_target';
name │ setting │ ?column? │ pending_restart
─────────────────┼─────────┼──────────┼─────────────────
recovery_target │ │ f │ f
(1 row)
After that we remove it from the config and call pg_ctl reload. It sets the panding_restart.
localhost/postgres=# select name, setting, setting is null, pending_restart from pg_settings where name = 'recovery_target';
name │ setting │ ?column? │ pending_restart
─────────────────┼─────────┼──────────┼─────────────────
recovery_target │ │ f │ t
(1 row)
IMO is totally wrong, because the actual value didn't change: it was an empty string in the config and now it remains an empty string due to the default value in the guc.c