Yep, that would break it if pathinfo is not available on your site.
That is why the last item in the note says:
Enable Spider-friendly URLs?
Warning: This function allows most search engine spiders to crawl the community and also allows for specially formatted URLs, which may result in higher bandwidth usage and server load.
Note: The PATH_INFO environmental variable must be available for this feature to function properly.
So I would guess that this is a windows server?
Because most linux based servers have this enabled.
And most windows based servers do not.
And probably why it worked for a little while is due to your browser cache.