That will change the overall machining velocity of the system, it is a hard ceiling, and does not adjust anything independently it's a blanket adjustment. So if your rapid is set at max system velocity, reducing the velocity side will immediately reduce your rapid, but will not effect the feedrate until it is adjusted below the federated setting.
You can load a program in the sim and play with it to get a feel of how it functions and see if this will work for your requirements.
