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Abs setting on the wheel doesn't have anything to do with using the abs setting in the game.
It simulates the lock up point (or a pressure before it) by vibrating the rim so you don't lock up the brakes. This can be used with or without the abs assist.
I guess I misunderstood how it works. I thought if it was off in game it did'nt register on the wheel. I don't use abs so I always left it off on my wheel and just went with engine vibration. I'll have to mess with it see if I like it better with it on. Thanks for the info.