"Logout user after (x) minutes of inactivity..." not actually logging out users On my network when a user is auto-logged-out, this feature seems to just activate fast-user-switching,  Is that what it is supposed to do?

I am talking about the setting, as seen below in El Capitain, from System Preferences, and you can also access this setting with profiles/mdm for example from the Profile Manager (formerly Workgroup Manager).  I have this disabled in both the local system and the profiles assigned to both the devices and user-groups.

I've also seen the same proposed issue in Yosemite.  This is annoying because when users don't logout, the system seems to go back to the login screen without clearing the RAM, possibly also locking files that are in use, etc.; creating a truly slow, buggy machine.
Activating fast-user-switching is indeed what it is meant to do. It does not log the user out, so to speak, but it does prevent account access without the user's password.

We must first understand that logging out involves quitting everything that a user has open, and locking only secures the account in its current state. This does introduce some form of overhead as logging out requires all applications to be quit.

There's also the slight issue of a user's unsaved files being lost if the entire account is logged out instead of locked.



Side note, you can achieve the same login window through checking "System Preferences &gt; Security and Privacy &gt; General &gt; Require password (x) minutes after sleep or screen saver begins".

Alternatively (although not advisable), running 

exec /System/Library/CoreServices/loginwindow.app/Contents/MacOS/loginwindow


will bring up the same lock screen.