I believe default Cab simulation is used by the default built-in DT preamps. I only verified what others did before for the 'American Classic' and confirmed (as best as I could to convince myself) that the HD500 Blackface Double Vibrato preamp with default Cab gets you the best match between an HD preamp based sound and a DT preamp based sound.

After the last DT FW update you can select a Mic model for what's sent to the XLR out. Don't know what the DT did before the FW update.

In regard to whether Cab models should be turned on or off you can only guess at what's more 'right'. Certainly whether you like the result is the most important factor. I don't think there is an absolute 'right' for this selection ...and if you really want to speculate one chould consider that the HD500 knows that it is hooked up to DT50 or DT25, i.e., it could 'know' the DT's default Cab tonal characteristics and adjust the Cab model to produce what the modelled Cab does. I am not saying this is what's going on. It's more an example for why 'right' is simply not right ;-). You're better off just picking what you like to hear ...

Martin