@SteveITS Correct, but this is in relation to NAT reflection, so the IP is being accessed externally.
I just didn't understand this setting until now. All it's doing is NATing the source IP to the routers IP on that interface, this way if the client tries to connect to the web server's public IP, but the web server is on the same subnet as the client, the web server itself sees the connection coming from the routers default gateway IP, this way it responds back to the router instead of trying to direct connect to the client (since they're on the same layer 2), so that the NAT reflection can NAT things back like it should.
I was trying to figure out why NOT having this setting enabled under Advanced > Firewall & NAT was still working, but that was simply because the NATing of the source was not necessary since the web server is on it's own subnet, so the web server is going to reply to the default gateway on it's subnet regardless.
As for split DNS that is exactly what I would normally do, but this is a bit more complex of an environment, but NAT reflection works perfectly in the meantime, I was just trying to be sure I fully understood the settings I was looking at.
All makes sense now though! Appreciate the replies here.