Just tested it and it certainly helps. Also increasing the settle score to around 900 helps too, although an insufficient score doesn't always stop settling. I think the AI may be settling anyway to bridge gaps in it's borders, or perhaps it just got tired of waiting.
Anyway I think another problem is that when a tile is closer than the minimum settle distance to another city it's score only get's halved, which is why exceptionally high scoring terrain (plains or grass with rivers) is often settled at any distance. I haven't checked this but it seems to be what's happening, see the screen shots above. I wonder what would happen if this score was also set to zero. Meaning you could only find tiles scoring above 0 above the minimum settle distance.
Anyway I think another problem is that when a tile is closer than the minimum settle distance to another city it's score only get's halved, which is why exceptionally high scoring terrain (plains or grass with rivers) is often settled at any distance. I haven't checked this but it seems to be what's happening, see the screen shots above. I wonder what would happen if this score was also set to zero. Meaning you could only find tiles scoring above 0 above the minimum settle distance.
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