I found another VATS related option in the tune for my dad's '06 3500, which I believe might actually be the one to look for to disable VATS entirely.
If you go to Constants>System Parameters and scroll down about halfway, you'll see a slider labeled "VATS (0=Serial, 1=PWM, 2=None)." In my case it's set to 0 (Serial) by default. I looked this one up in the "Calibration Parameter Help" directory, which is proving to be very handy. Here's what it says about this parameter:
"This constant specifies what type of Vehicle Anti-Theft System is installed.
0 - Serial VATS
1 - Pulse Width Modulated (PWM) VATS
2 - No VATS
This constant should be set to 2 to disable the VATS."
Where as the option I found previously (Switches>Calibration Options>VATS Fail-Enabled Option check box) has this very limited description in "Calibration Parameter Help":
"This switch enables/disables the theft fail-enabled mode."
Seems to me that the fail-enabled check box is probably intended as a quick troubleshooting tool that will enable the vehicle to start even if the VATS signal is not what it should be, and the VATS slider in Constants>System Parameters is what you want to use to disable the VATS permanently. I could be wrong, but that's the impression I'm getting. At least for this vehicle.