Script /etc/sysconfig/network-scripts/ifup-ppp only partially processes "DISCONNECTTIMEOUT" and "RETRYTIMEOUT" parameters. The options never get passed to the ppp daemon. That is, they are never added to the '$opts' variable as "idle ${DISCONNECTTIMEOUT}" and "holdoff ${RETRYTIMEOUT}" if they are not null (which they never are, as they are defaulted at the start of the script).
Please verify this with a newer version of Red Hat Enterprise Linux or Fedora Core and reopen it against the new version if it still occurs. Closing as "not a bug" for now.
The ifup-ppp script distributed in rpm package "initscripts-6.43-1" (Red Hat 7.2), does not have this flaw. This bug can be considered truely stood upon (not just closed, but fixed :>)