Those buttons are obviously shortcuts for friends only or nobody. We know this, your point is new players do not. Sure the game doesn't explain this, but it could with a mouse over tooltip. Singleplayer could say - Solo experience, you create and control both main characters and all hirelings, other players can't join your game. Then multiplayer could say - Co-op experience, players from your steam friends list may join your game at character creation, you each create and control a main character and can assign hirelings in game, friends can drop-in/out at any time. Then it could have a disclaimer at the bottom "you can switch between single/multiplayer at any time in game with the gem above the minimap". Suggestions are better than pointing out a nitpicky flaw over and over, right? Constructive feedback or some such...

Another suggestion could be that they change it to pop up the same multiplayer option menu you get when you press the gem on the minimap when you press new game (no single or multiplayer button required - I assume this is what you're suggesting they do with the "button is redundant and may confuse someone - so why not remove it" argument), and then explain to you in a tutorial popup that you can change this at any time when you load into the game by pressing the gem near the minimap.

They could also leave it as is, if someone is confused they'll figure it out. People aren't THAT slow, and if they don't understand it they'll ask in general chat or on the forums.

Some players aren't going to be using the steam version and are just playing for the single player experience. For them the entire multiplayer option is redundant, it wouldn't make sense to remove it for their sake, right? More options is generally better, and yes they are redundant since they affect the same thing, but once you know what they do it just serves as a shortcut to get into the game quicker with friends or by yourself. The answer lies in letting people know what effect the option has on the game (obviously to us, very little), which I'm sure a manual will do (or tooltips like I suggested).

If anything remove the 'multiplayer' option in the options menu, that's the truly redundant option when we have the gem and the new game -> single or multiplayer options. I assume this is here for when we get LAN support later on, for which it would be fine to leave it. Also the multiplayer option needs to be persistent and not constantly reset to 'nobody', though I'm sure that will get fixed in a future patch.