Actually, I don't recall it ever working. With the option checked, the crop rectangle always stays within the boundaries of the image. It will shrink if needed when you rotate the crop, etc. But with the option unchecked, I'm reading elsewhere that this should allow me to move the crop rectangle outside the boundaries of the image. This does not happen. There is no apparent difference between this option being checked or unchecked. Am I missing something?
I don't think so.
When the Constrain option is unticked, I can include any amount of grey canvas in my crop selection. As I soon as I tick it again, the crop automatically shrinks to fit (and usually a bit more).
The crop box is always at least constrained to the original image rectangle; however, if you deform the image with Lens Corrections, then you can see gray when parts of the image have contracted inside the original image rectangle due to some deformation. The easiest way to demonstrate this is to uncheck Constrain, then Rescale to 50 in the Lens Corrections - Manual area and rotate the cropbox around, and then enable Constrain and see how the cropbox contracts.