Does "remote login disabled" disable the redirect or disable the WordPress admin at the primary domain address? When you talk about redirect, do you mean than the login view is redirected befor the user enters anything or that the actual login form points to a different domain than where the subsite was?
None of your explanations are ever remotely accurate yet.
Also, when I test at my WP Network having this option on or off, it does not seem to have any effect. Users of sites always end up at site.wpnetwork-master.com/wp-admin/ no matter it they log in from site.com or site.wpnetwork-master.com. So I'm really keen to know what it is supposed to do so that I can debug it.