Yes, many people wear them so loose as to seemingly be useless. But I think they still provide an end point to how far the pad can travel in certain directions, even if that end point is probably further out than it should be.
I hate using personal anecdotal evidence as a basis for an argument because of the small sample size. However two weeks ago, I was having all sorts of issues with my left pad. It wasn’t rotating correctly, over- or under- rotating without much reason, not returning to neutral, pulling away from the leg. It was the strangest thing. Until I got undressed and realized I hadn’t strapped the boot strap. It’s elastic, so it was just stuck up between the pad and skate. Even though I use the Lundy strap and the strap itself is elastic (so no real tension on it), not having it attached blatantly cause issues with the way the pad moved and performed.