Absolutely, it will rewrite the url for all users, no matter what.
Not rewriting url for users can save a bit of ressources, but, actually, getting rid of ob_start() in the process is a lot more efficient, so, I don't think this type of choices could be wise here.
Anyway, it would be very easy to add similar feature in this mod,even though I don't recommand it. Your user will be posting links, and the best still is to always use the good ones.
Especially when a lot of links are posted in the forum, which depends a bit on the type of project.
The only reason why not rewriting url for user is to save some server resources, but this is even less an issue with the phpBB SEO mod Rewrites cause they are not using ob_start() any more and the Reg Ex are performed in the end on a smaller part of the code.
For sure title injection is performing quite some string replacement, but they are all fairly simple and I don't think this is making that much of a difference.
Anyway, a good way to find out would be to install a page generation timer on the test board, since it possible there to compare all the different possibilities on the same server : title injection everywhere, only in forums and cat url, fully static and no mod rewrite.
I'll do this soon so we will have precise datas on this everybody can check.
Have to find a way to make interesting stats about it.