When enabling logging/auditing for multisite (multi-domain), does it need to be enabled for each site/domain?
You're correct that logging is at the database level.  It seems like a bit of a loophole that it can be enabled-disabled on a per-domain basis.  I would set it to TRUE on all domains to avoid unexpected behavior, but my guess is you'll only have a problem if you disable it on one site and expect it to continue working on others.