0 | Physical cancels: any program canceled during run-time will be freed from memory, making more memory available. |
1 | Compatibility mode. As Logical cancels mode, except that .dll files or shared objects are physically canceled. This option is present for compatibility with older products. |
2 | Logical cancels: any program canceled during run-time will not be freed from memory. The program is available to be reused and hence the performance of CALL/CANCEL statements is greatly increased. |
As far as your program is concerned, logical and physical cancels behave identically.