Simpler explanation is the door has to be closed to lock it.
If door is open the lock latch will not push down.
So, you can lock door from inside (when closed), or the key is needed when outside (door closed)

Annoying feature for passenger door, driver has to wait until passenger exits and closes door, and then reach over and push lock button down.

I cut off the tab on passenger latch to get rid of this 70 only feature.