Could reproduce here, so confirming this issue and moving thread to confirmed issues.

Actually, I did forget that CB 1.2 RC 2 has its own parameter also for this:

In CB configuration, User Profile tab, "Allow user to edit his CMS parameters in frontend".

That one is ON by default, and overrides Joomla's one.

I'm adding a visible warning to CB configuration if that param mismatches joomla's setting.

So this is not a bug.

Thanks for reporting.

This issue has been addressed and fixed in Community Builder 1.2 RC 3, like all other known issues, and is available now for a last short rounds of live site testings, before CB 1.2 Stable release.

================= ISSUE FIXED ====================