Adjust for record latency - results in audio placed where I heard it, or where I played it?

I’m monitoring through Cubase via a low latency Presonus Quantum interface.

I understand that “adjust for record latency”, when checked, takes in to account plugin latencies when recording.

But just want to make sure I’m interpreting this correctly:

  1. Does this compensate specifically for the latency of any plugins on the track I’m recording? e.g. is this setting only concerned with plugins on the track being recorded, not any other plugins in use in project?

  2. Does it then, in effect, place the audio where I hear it, or where I played it? - e.g. say I’m playing dead on the beat, physically hitting the notes in time with the rest of the track as it plays back - but the audio of my playing that I’m monitoring is delayed by a certain ammount due to latency of plugins on that track - call this ammount “X ms”. If adjust for record latency is activated, does it then place the audio exactly where I played it (again, presuming I played dead on beat), or does it assume I was timing my playing according to the delayed audio of it, and hence place the audio on the track at X ms before the beat?

Wish I could think of a simpler way of explaining part 2 of that question, but hope that makes sense!