The LZ is the length in local Z axis for the Slenderness ratio calculation and it is just a geometric check against the allowable limit specified by the respective design code. As the slenderness check does not account for the actual axial load the member experiences hence your point is correct as it has noting to do with strength check.
So, if you want Staad to suppress this slenderness check against compression and directly report the the failure ratio based on the strength criteria then you need to use the design parameter MAIN 1 (for AISC) or MAIN -1 (For Indian Steel Code) in your input editor
So, if you want Staad to suppress this slenderness check against compression and directly report the the failure ratio based on the strength criteria then you need to use the design parameter MAIN 1 (for AISC) or MAIN -1 (For Indian Steel Code) in your input editor