If I set the tool diameter in Mach 3 and then load a gcode file, will the setting I added for the tool diameter override and stay the same and be used instead of whatever the gcode file has in it?

Does Mach 3 compensate for the diameter of the tool with the toolpath? Meaning if I set the tool diameter to something very wide, will Mach 3 Cut outward from the toolpath to compansate for the width?

Thanks!