No, unchecking the option simply means the document retains whatever Style formattings it has, instead of changing them back to whatever is in the template. Of course, if you made the change to the 'automatically update document Styles' attribute on your PC, the document couldn't do anything but retain your PC's settings as it would already have updated itself to reflect them.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]