Answer
Yes, the 0-10v dimming will still fade the level of the lights. The 'Always On' mode will only affect the relay itself so that at a level of 0% the relay stays on. This is useful for 0-10v fixtures that dim all the way out at 1% and do not require the relay to switch off.
If you wish to have a 0-10v fixture that is always on and does not dim, set the output to 'Always On' and remove the 0-10v control lines from the 0-10v option card and cap them with appropriate wire caps.
NOTE: Do not cap them together, but separately.