The build failure is easy to fix, so I created a repo at [2] which builds a program against a glibc with static nss. I verified with strace that it does indeed check nsswitch.conf and try and load dynamic libraries (I'd at least submit my patch [3] for the build failure but I find mailing lists to be a hassle)
All this said, I wouldn't call it undocumented - it's documented in the `configure --help` itself as well as the online version [4], and it has an FAQ entry [5].
[1] https://sourceware.org/bugzilla/show_bug.cgi?id=27959
[2] https://github.com/aidanhs/gcc-static-linking
[3] https://github.com/aidanhs/gcc-static-linking/blob/1f04425e2...
[4] https://www.gnu.org/software/libc/manual/html_node/Configuri...
[5] https://sourceware.org/glibc/wiki/FAQ#Even_statically_linked...