Firefox has two settings for search suggestions
One checkbox called "Provide search suggestions" and one called "Show search suggestions in location bar results".
When both are checked, it will show search suggestions in the location bar dropdown, but what happens if only the first one is checked?
If Provide search suggestions is enabled then search suggestions from your preferred search engine for the Search bar, home page and New Tab page will be provided.
If Show search suggestions in location bar results is disabled then search engine suggestions will not be shown in the location bar (but search suggestion will still be used for the home page and New Tab page).
Notes:
Will it just send what you type in address field to the search partner(s)
Yes it will send what you type the the search partner(s). It must do this in order to "retrieve the search suggestions from the search engines".
Search suggestions help you to find out common phrases that other people have searched for. The search suggestions are offered by the search engines (such as Google, Yahoo, etc.) and not by Firefox. Firefox merely retrieves the search suggestions from the search engines, and displays the list to assist you in selecting a search phrase that has been used by many other users throughout the world before.
Source Use popular search suggestions in the Firefox Search bar
Change preferences for search engine suggestions
To enable or disable search engine suggestions, click this link to be
taken to the Search settings panel.
Add a check mark next to Provide search suggestions to enable search suggestions from your preferred search engine for the
Search bar, home page and New Tab page, or remove the check mark to
disable them.
To enable or disable search engine suggestions for the location bar, add or remove a check mark next to Show search suggestions in
location bar results.
Source Awesome Bar - Search your Firefox bookmarks, history and tabs from the address bar