thanks for the question. Yes, LumaFusion does render the output. When you export you can choose at what resolution, frame rate and video quality (measured in Mbps). The selected resolution will have an impact on the choice of Mbps. For example, when selecting the resolution 4K you will find a quality of 100Mbps. The higher the number of Mbps the less compression occurs.
The starred settings are the recommended settings for export based on your current project settings.
Hope this helps
And this is a big benefit from LF.
But seriously, if you export 4k or at least 1080p material with extrem quality nobody will ever see any difference, even there is no visible difference between extrem and high quality export for me
So in the end my recommendation for the TO is try it always with extrem quality and then compare it with the lower one (high), if you see a difference, continue using extrem - but the used space stands in no positive relation to the extremly small or unvisible loss of quality when you're using just high quality - so for even for ambitious user high quality seems to be more than enough