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I agree that it's confusing. To understand what's happening, note the EnergyPlus documentation for this field:

This alpha field defines the name of the supply air fan operating mode schedule. Schedule values equal to 0 denote cycling fan/cycling coil operation. All other schedule values denote constant fan/cycling coil operation.

In OpenStudio, the "Always Off Discrete" schedule is a generic schedule with a constant value of zero throughout the year, while the "Always On Discrete" schedule is a generic schedule with a constant value of one throughout the year.

Therefore using the "Always Off Discrete" schedule for the Supply Air Fan Operating Mode Schedule field is telling EnergyPlus that the fan cycles with the system (whereas using the "Always On Discrete" schedule would tell EnergyPlus that the fan is continuously running).