Three of us started a new multiplayer game last night with the settings above. We chose Distributed Players because we didn't want to start close to each other. After we started the game the Hyperdrive player found me almost immediately because we were adjacent and I have a distinctive home star name. Communications were established after that. The 3rd player must be on the other side of the Hyperdrive player, because I was only half way toward researching colony ships when they started discussing their trade agreement on the in-game chat.
We were hoping that Distributed Players would give us a little breathing room so that we encountered each other when we had 3-4 system empires, not before anyone had any colony at all. Would an elliptical galaxy produce better results?