In config_defaults_inc.php, the doc for $g_send_reset_password is

# if ON users will be sent their password when reset.
# if OFF the password will be set to blank. If set to ON, mail settings must be
# correctly configured.
$g_send_reset_password  = ON;

However, this value also controls user account creation. Suggested change to config_defaults_inc.php:

# if ON then users will be sent their password when account created or 
# password reset (mail settings must be correctly configured)
# if OFF then will prompt for password when creating account, and
#  password will be set to blank when reset.
$g_send_reset_password  = ON;