I do not know a more authoritative answer than the source code and yes, you are correct in your answer - the release of the memory will happen only after a Full GC (at least before that JEP).
For java-8:
That argument does matter, look here for example.
That code is not very complicated to understand, and here is the actual shrink that happens.
For a much more extensive answer (regarding java-11, but still qualifies to java-8), read this.
The bottom-line is that - that flag does matter, but how exactly is implementation dependent. There is no simple answer to your question.