In fact, the crucial point about the S flag is that it indicates that the source
IP address is usable and was the signalling source address. Revised text in
5.2.1 has this emphasis:

   Source addressing mode: A flag to indicate that the IP source address
      of the message is the same as the signaling source address, in
      which case replies to this message can be sent safely to this
      address.  It is not set if it was derived from the message routing
      information in the payload and this is different from the
      signalling source address.

(also changed in C.2.1).