AFAIK the option does work for disk based backups however I recommend that you test the performance. Basically time the backup of a client with and without Multiple data streams to disk and more importantly test the restore. Remember allow multiple data steams is usually used with ALL_LOCAL_DRIVES which is a variable. As such you should test to determine the lower and upper boundries and it's effects. I have also listed some points below from my experience
Use example Windows client with ALL_LOCAL_DRIVES as backup selection. The Windows host is a type 2003 and has local drives C and D
Without MDS
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1 job
With MDS
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In my example you should get 1 parent (all_local_drives) and 3 children (C , D and Shadow copy components)
Side notes
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Things I would look at are storage units, job limitations, jobs per client, master server host properties for the client. Disk i/o on the target storage unit from both testing with and without multiple data steams ( you should probably check on the client as well)