The documementation for git-update-ref is part of git, and git does not use anything outside of refs/{heads,tags,remotes}/ for its normal operation. I think it is generally assumed that there is nothing of interest outside of these areas that deserves the automated creation of reflogs, and the code you are touching is about that. Once you have reflog for any ref you are interested outside of these areas, your actions will be logged regardless.
Most notably, refs/stash itself is exempt from this code path and it makes sure that reflog exists without relying on log_all_ref_updates configuration.
Also the documentation for the configuration variable explicitly says it is about the branch heads.
core.logAllRefUpdates::
Enable the reflog. Updates to a ref <ref> is logged to the file
"$GIT_DIR/logs/<ref>", by appending the new and old
SHA1, the date/time and the reason of the update, but
only when the file exists. If this configuration
variable is set to true, missing "$GIT_DIR/logs/<ref>"
file is automatically created for branch heads.