In Ambari 126.96.36.199, the "Use RedHat Satellite/Spacewalk" button does not work and persist.
I have outlined the procedure to test. in "Testing Procedure" field below. In addition to that, even if we go and manually edit the repository file, next time Ambari does a Install operation (can be triggered by "Stop All/Start All" sequence of operations ), it overwrites the file with original repo files and not leave it to Satellite managed.
The feature works as expected in Ambari 188.8.131.52.