LCOSV does not decide if an extension can forward or not.
Features for an extension are decided with COS

@sbcsu

I have the above setup for COS=1. Which parameter would disable forwarding to outside numbers? If you could point me in the right direction that would be super helpful.

Thanks,
Umar

Remove FWDEXT and then test

Tried with FWDEXT, didn't work. Tested with FWDNWK (Call forward to Network i.e. external destination) and works ONLY on HFA extensions. I also have SIP extensions (Yealink T19P E2) but this feature has no effect on them.

what exercise? you want to disable already activated call forwarding or you want to forbid users use this function?
you can see actual CFW:
DISPLAY-ACTDA
type STN

FWDNWK is the right parameter to use.

Forwarding from SIP phones can be done a couple of ways.

You can dial the forwarding activation code, which the 4K will receive from the phone and process it as normal. In this case, on V10 at least, FWDNWK still works, but it works at the time of forward activation, so adding or removing FWNDWK from COS is not enough, you have to make the COS as you want it, then try and set the forward. If the forward is set, and you remove FWDNWK, it will still forward. But try and set a new forward, and it won't allow.

The other method is to set the forward on the phone directly, in which case the 4K knows nothing about the forward because it's now a function of the phone, not the 4K. When the phone receives a call, it might do something like send a 302 Moved back to the 4K. How the 4K processes that is a function of the STMI loadware and 4K software. If you have a problem there, then you're stuck with a problem, as there is no more support for V7 software.

A wireshark trace of the phone setting the forward then receiving a call will give you a better idea what is happening.