If you create a new project and use the default project PET-MR setting (which is to simply use the site setting), it will work just fine. However, once you change the project setting to anything else, and then change it back to the default setting, the split action will simply ignore the site setting and use whatever the project was configured to do previously. Note that this affects current 1.6 code as well (so it's not new in 1.7). If you want clearer steps on what I mean, here it is:

1. Create a new project, but do not touch the project's PET-MR setting.
2. Set the site PET-MR setting (under Session Upload, Import, & Anonymization) to split PET-MRs into 2 separate session.
3. Send to the DICOM receiver with the project routing correctly. Once you rebuild the session XML, the session should be split. That's good.
4. Delete the session.
5. Change the project setting first to create the session as a PET session. Then change it back to the default setting.
6. Send the DICOM again, and rebuild the session. When it finishes, it will be ready to archive as a single PET session. That's not correct.

—
There also seems to be another issue like this:

1. Create a new project
2. Switch PETMR setting to "Create as PET/MR Session"
3. Switch PETMR setting to "Use the system default"
4. Repeat step 2
   If you reload the page, you will find the PETMR setting is stuck on "Use the system default". That seems to be because that setting issues a DELETE to the config service. When it gets set again in step 4, it doesn't explicitly enable it, so the tool gets brought back is disabled state.