See following docs saying all the same: set this property to TRUE if you experience performance issues (which is a subjective opinion to start with)
E-ORA PeopleSoft Functional or DESC indexes cause performance issues. [ID 1302068.1]
E-ORA: Descending Index Performance Issues in Oracle Databases [ID 662220.1]
E-ORA: CLSAUDIT.SQR: Unable to Extend Temp Segment PSTEMP [ID 1197064.1]
Also see this blog from Nicolas saying the parameter is by default false.
I also fired up my OVM template sandbox (PeopleSoft installation delivered by Oracle) and this parameter is not defined in the init.ora, so parameter should be false and only be set to true if you experiencing issues.
Hakan, the default value is "false" and cause a lot of performance troubles. In previous release it even raises some ORA-600 errors.
By setting this parameter to "true", you workaround an Oracle bug which is misled and have a wrong explain plan. It seems this bug will be solve in future 12c... to be followed.
If this parameter is not set to true in Peoplesoft OVM (I don't have one to verify), it does not surprise me. PSOVM is nothing but the bare minimum configuration for a demo, most likely we don't care about bad performance on a demo, right ?
Of course it has to be discussed and tested, but I think it's a recurrent issue for the last few years and Oracle versions.
Find out more +Required Interim Patches for the Oracle Database with PeopleSoft [ID 1100831.1]+*
tab "Oracle 11gR2 - 188.8.131.52.0" - bug number 11072246