Sure does, that is the main attraction of the tool, doing smooth monthly updates while keeping root and not messing with anything.
Please note that if you have any Magisk modules that are not compatible or don't play nice with the future Firmware updates, you might run into issues, hence it is advisable that you disable suspect modules (all through PF) prior to updating.
In any case, even if you don't disable them, Flashing to Inactive slot will save you, it will boot back to the previous OS, and you would repeat the flashing, but this time disabling suspect modules first.
By the way, none of my modules has ever caused problems, I don't disable them.
BuiltIn BusyBox enabled 1.0.3
Axet's Call Recorder enabled v1.8.2
Systemless Hosts enabled 1.0
Magisk Bootloop Protector enabled v1.8.1
Universal SafetyNet Fix enabled v2.3.1
SQLite for ARM aarch64 devices enabled v1.3