I have the program. I know what it does. Even if it doesn't create a new OBJ, it's still using the original geometry. Period. If you're asking if it creates textures, the answer is no. Basically it creates, secondskins, or as we used to call them in the old days, "BodySuits". It also now creates gloves, socks and masks as of version 2. All these functions access the original geometry and create a "sleeve, second skin, bodysuit, whatever you want to call it, that fits over the original figure that you can add textures to. These suits/skins what have you all use the original characters geometry.
The "Option" that you're speaking of gives you the choice of saving a new OBJ for the skin or just saving the CR2 with reference calls to the original geometry of the figure. Either or.