The "LTIConfigValues.config" file is a distribution file that shouldn't be modified. It just contains the help documentation for the LTI configuration variables that are shown if the LTI tab is made available in the course configuration page in the user interface.
"$LTIGradeOnSubmit" determines if grades are submitted to the LMS when a student clicks the "Submit Answers" button in a problem. It is an independent setting from the "$LTIMassUpdateInterval".
"$LTIMassUpdateInterval" is the time in seconds between times that a mass grade pass back will occur. That is grades for all students and sets will be submitted to the LMS. Set that to -1 to disable this mass grade pass back. Note that the actual interval will frequently not be exactly this value. The way that it works is that as soon as the given number of seconds have elapsed since the last grade pass back, then the next time that a user in the course accessed any page for the course a job will be enqueued to perform the grade pass back. So it depends on when the next time is that someone accesses the course after the time has expired. Then the job may be delayed in the queue depending on if it has to wait for other jobs to finish.