How can I tell if the settings are actually being applied? Does it show it somewhere in the registry? I see the file C:\Windows\SysWOW64\Macromed\Flash\mms.cfg being copied locally by the GPO but how do I know that it is actually being applied.
We read the config file at launch and apply any settings. I can't think of a way to externally validate this beyond verifying that the file is in the correct location, without directly inspecting the player behavior. (e.g. If you wanted to know if the camera was really disabled, you could launch a script that hits a test URL and returns a pass/fail result, etc.)
We trust that correctly deployed (e.g the file is correctly formatted, in the right location, and has permissions that allow the client to read it), the settings in the mms.cfg would be honored. Flash Player only reads the config at launch, so any in-memory processes (open tabs) would not know about the config file change until the page is refreshed. The config file itself is the source of truth here.