Suppose we have a surface $X(u,v)$ where $(u,v)$ are conformal curvature line coordinates with the first fundamental form $$ds^2 = \lambda^2(du^2 + dv^2).$$
Does the fact that $\lambda_u = 0$ (or $\lambda_v = 0$) imply that this surface is a surface of revolution?
No; $S$ could be a cylinder (over an arbitrary curve) parametrized by $$ X(u, v) = (x(u), y(u), v),\qquad x'(u)^{2} + y'(u)^{2} = 1. $$