Am I correct that this feature works like the FSNavigator "fly flightplan" toggle? In other words it's not necessarily following a "GPS flightplan" but rather, following the loaded FSX flightplan, whether it was saved as Direct, VOR, or whatever.

If that's an accurate description, then I think it's innacurate to say that if you use this you are not navigating realistically. You can fly a perfectly realistic VOR or Hi Altitude airway flightplan and use this feature which is very handy when you want to step away from your PC for a time.

I don't see how letting the sim take over for a few minutes is any less realistic than pausing the sim  ;)

Considering this is a pc simulation, and not everyone can sit at their pc for 4 hours at a time, I think it's very practical feature that all developers should include (most of them do) on classic non-FMC aircraft.