I messaged the FOSE team, and got this response from Ian Patterson:
It looks like the docs are incorrect. The first parameter is a scan code, the second is an integer (interpreted as a bool) that is true to register the key and false to unregister it. It's only useful so that other mods can check if the key is currently in use via IsControl.
That's about how I would have guessed it would work, but I was too lazy to test it. Even with it used correctly, you can run into some problems - if one mod's hotkey triggers a menu, and you're trying to reassign a hotkey for your mod, there's a chance that that mod's menu will pop up if the user presses that hotkey regardless of whether the other modder flagged it with setiscontrol. It does help with non-menu mode hotkeys though. But yeah, if they read their readmes the user should be able to keep track.
My primary needs mod has 3 reassigneable hotkeys, I think I've got that much down, I just thought it would be a good idea to start using this command. Thanks though.
By the way, I just used your Chicken and Egg resource to lower that mod's file count. Works great.