Yes, it separates the Pantone colour out almost like another layer.

When you usually send something to print, it gets converted into four colour layers—cyan, magenta, yellow and black. These become individual printing plates (or toner/ink layers in digital print), and mix together using dots at different densities to achieve the colours you used in your file.

If you use a Pantone colour, it’ll be converted into its own layer/plate, and printed using the selected Pantone formulation. This will be noticeable next to a CMYK mix because it’ll be a nice flat colour, while the CMYK mix will be made up of patterns of dots from each component colour.

edit: you don’t actually need to specify Pantone colours to do this either. You can simply set a colour as a spot colour and it’ll appear as its own plate (also known in software as a separation) for the press.

In the file, it stores "This item is pantone-1234", and lets the software using the file figure out what to do with it. So when it's rendered to screen, it uses a lookup to pick a good RGB color. When it's printed in CMYK it uses another. When you check it against what light it reflects, that's it's own set of rules about what it's "supposed to" look like. Fancy industrial printers have the ability to load specific inks for specific colors. So a press might support 4 colors, which you normally load CMYK. But let's say you're making a bunch of pamphlets for one company, which is black and white, but they want their logo on each page. You can load Black, and 3 other customs colors in instead. Some machines support something like 8 colors, just for this reason. Sometimes you need to load white ink because your printing on non-white materials. CMYK is just the most basic way of printing color.