chevy style HEI on 318

I've read/believe that if you use the 7-pin module (top-right) in our cars, and only connect what's really needed, the 4 pins, the module is in 'bypass'-mode (thinking the engine is starting) all the time.
Think to have read the timing is retarded. This doesn't matter if you set timing normally at the distributor, but I'm wondering if this 'bypass'-mode also have any implications on the dwell time adjustments of the module?