browser.urlbar.autofill negates Location bar suggest preference

Starting with a blank profile (all files deleted) I load Firefox.

I make the following settings on the Preferences Privacy tab
  History - Use custom settings for history
     [X] Remember my browsing history
     [X] Accept cookies from sites
          [ ] Accept third party cookies
          Keep until I close Firefox
      [X] Clear history when Firefox Closes
           [Settings] do not clear Browsing history, Saved Passwords, Site Preferences; clear all other items
  Location Bar
       When using the location bar, suggest: [History]

I then type in a couple of URLs, close and restart Firefox. As I type the first couple of letters of one of the URLs which I had accessed and which are in history, the complete URL is displayed as a choice in the Awesome bar ( I think that is what it is called). This is how I expect Firfox to work.

I then import a selection of bookmarks from an HTML file. These were exported from another Firefox profile. I again type the first couple of letters of one of the URLs which I had accessed and which are in history. Just as I described above, the complete URL is displayed. So far, so good.

Per the Firefox documentation at http://kb.mozillazine.org/Inline_autocomplete I change browser.urlbar.autoFill to true.

Firefox now presents URL choices from the bookmarks in addition to history even though the Privacy preference still indicates the suggestions should only come from history. If I change the preference to When using the location bar, suggest: [Nothing] I am still presented with choices from the bookmarks.

This would seem to be incorrect behaviour. Suggestions from bookmarks should NOT be presented.

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: firefox 12.0+build1-0ubuntu0.10.04.1
ProcVersionSignature: Ubuntu 2.6.32-41.88-generic 2.6.32.59+drm33.24
Uname: Linux 2.6.32-41-generic x86_64
AddonCompatCheckDisabled: False
AlsaVersion: Advanced Linux Sound Architecture Driver Version 1.0.21.
Architecture: amd64
ArecordDevices:
 **** List of CAPTURE Hardware Devices ****
 card 0: AudioPCI [Ensoniq AudioPCI], device 0: ES1371/1 [ES1371 DAC2/ADC]
   Subdevices: 1/1
   Subdevice #0: subdevice #0
AudioDevicesInUse:
 USER PID ACCESS COMMAND
 /dev/snd/controlC0: ken 1984 F.... pulseaudio
BuildID: 20120423142301
CRDA: Error: [Errno 2] No such file or directory
Card0.Amixer.info:
 Card hw:0 'AudioPCI'/'Ensoniq AudioPCI ENS1371 at 0x2040, irq 16'
   Mixer name : 'Cirrus Logic CS4297A rev 3'
   Components : 'AC97a:43525913'
   Controls : 24
   Simple ctrls : 13
Channel: release
Date: Sat May 5 11:18:47 2012
EtcFirefoxSyspref: Cannot parse /etc/firefox/syspref.js - [Errno 2] No such file or directory: '/etc/firefox/syspref.js'
ForcedLayersAccel: False
IfupdownConfig:
 auto lo
 iface lo inet loopback
InstallationMedia: Ubuntu 10.04.3 LTS "Lucid Lynx" - Release amd64 (20110720.1)
IpRoute:
 192.168.0.0/24 dev eth0 proto kernel scope link src 192.168.0.104 metric 1
 169.254.0.0/16 dev eth0 scope link metric 1000
 default via 192.168.0.1 dev eth0 proto static
IwConfig:
 lo no wireless extensions.

 eth0 no wireless extensions.
ProcEnviron:
 LANG=en_US.utf8
 SHELL=/bin/bash
Profiles: Profile0 (Default) - LastVersion=12.0/20120423142301
RfKill:

RunningIncompatibleAddons: False
SourcePackage: firefox
dmi.bios.date: 06/02/2011
dmi.bios.vendor: Phoenix Technologies LTD
dmi.bios.version: 6.00
dmi.board.name: 440BX Desktop Reference Platform
dmi.board.vendor: Intel Corporation
dmi.board.version: None
dmi.chassis.asset.tag: No Asset Tag
dmi.chassis.type: 1
dmi.chassis.vendor: No Enclosure
dmi.chassis.version: N/A
dmi.modalias: dmi:bvnPhoenixTechnologiesLTD:bvr6.00:bd06/02/2011:svnVMware,Inc.:pnVMwareVirtualPlatform:pvrNone:rvnIntelCorporation:rn440BXDesktopReferencePlatform:rvrNone:cvnNoEnclosure:ct1:cvrN/A:
dmi.product.name: VMware Virtual Platform
dmi.product.version: None
dmi.sys.vendor: VMware, Inc.