Yes it does generate. I wrote it above.
Once I check the BIP39 and type in only followong derivation path: m/44'/0'/0' - then I get different addresses which I have used after I have updated the wallet.
If I don't check the BIP box then it generates the wallet I had after the update.
I'm having some slight troubles understanding what you're implying.
So first of all, if you've generated the wallet by selecting Standard Wallet > Create a New Seed, then there is no need to mess with any derivation path. The derivation path for Electrum standard seeds are always correct and has never changed.
The only reason why you would check "BIP39 Seed" is if you've used that previously *AND* sent your funds to it. If not, there is no need to check "BIP 39 seeds". Unless the user specifically asks for their seed to be imported as BIP39, then Electrum won't use BIP39 and you shouldn't restore your wallet using that.