Craig - Well yes and no. The collar sleeve rotated and locked the steering wheel and then allowed the key to be removed. This was the first attempt by GM to harden the entire fleet to the increasing complaints from the insurance industry that any blind two year old could start any GM and drive away with it. Not that the system was fool-proof and easy to get around with a screwdriver.
Yes on manual transmissions the the sleeve also activated the column mounted reverse light switch. On Automatics the backup light switch could be on the column, or on the transmission, all depended if she was on the tree or on the floor.
The neutral safety switch also lived different places based on transmission and shifter options. Manuals the switch was actually on the clutch pedal - could not be started in any gear - clutch had to be depresses or she won't crank. But the anti-theft lockout only allowed reverse as the gear choice when removing the key. Automatics could only be started in Park or Neutral and again this was located dependent on options.
Yes you can lock the sleeve in the "locked" position allowing you to remove the key. It will not lock the steering wheel by design as long as the key is turned past off. Failures are rare of the ignition core allowing the wheel to lock in other positions.
I have gone back and forth with my transmission rod activating the lock out. I like to park in First gear in the garage, my driveway is a hill so just mental floss insurance. When missing the rod, I manually rotate the sleeve to deactivate my racing lights
But in some remote corner of my mind to also guard against the wheel ever locking on me while driving. Totally irrational I know but just piece of mind.
I'm not sure what aftermarket options there are for anti-theft. Ask your insurance agent what the cost in coverage would be to run without any theft-protection factory or aftermarket including the fact most factory of that period and aftermarket add on's such as the claw are defeatable in a few seconds.