An ‘off’ indicator won’t affect the operation of a signal. Even a banner repeated failing should only affect the signal in rear. Presumably LowLevel refers to the “up” or “dn” indication failing on an ‘off’ indicator - in which case I’m not sure but I suspect not.
My understanding, generally, has always been that ‘off’ indicators will be provided where they’re in a position where they’re needed for dispatch purposes only (even if they can be seen by a driver, and potentially useful albeit not absolutely required) and a banner repeater provided where the driver might need to rely on it too. An ‘off’ indicator, for example, might be provided where the obstacle to clear sighting is the train itself (or it’s too close to the buffer stops to be any use to a driver), whereas a banner repeater might be needed where other trains or structures get in the way.