UpdateAI not only triggers and captures recordings of scheduled Zoom meetings, we also will record meetings that are created instantly on Zoom.
As soon as an instant meeting is started, UpdateAI will look to see if the meeting details match any previously scheduled meeting in your calendar. If they do, we will associate that instant meeting with the scheduled event and trigger to record the meeting based on your settings for that meeting.
If we don't find a match, we will consider this meeting an ad-hoc, instant meeting that was not previously scheduled. We will trigger Zoom to record the meeting (regardless of whether the user's PMI (Personal Meeting ID) was used).
Since we don't know whether this unscheduled meeting is internal or external facing, your settings for "Record internal meetings" will not have any effect.