What does "Level flat to 3/16 per 10 foot radius" mean?
No that doesn't satisfy the requirements necessarily.  3/16" over 10' is the allowed variance in slope.  That means you are allowed 3/160" every foot, not the 10/160" that you are stating.  

The abruptness of your use case is what would worry me the most.  For instance if someone had a flat room and then it went up by 1/8" over a two feet span and then continued flat after, I wouldn't be overly concerned about that (althought I would probably throw a few feet of leveler down the day before install).  A lot of installers would just shim some underlayment or shingles here.

Having a dip is a different story because where does the pressure go?  Every time that you walk on that section the wood will "bounce".  Depending on the install method and wood it could eventually fail.  At best it is an odd spot on the floor.  For an area like this I would DEFINITELY fill it with leveler.  This is just $20-50 to make you feel a lot more confident in your install.