Hi Jon,
I'm not sure who told you the change would be immediately reflected in production. No changes are sent from the UI into production without approval and publishing workflows. The only way this might be true would be if your production site had the staging library deployed instead of the production DTM library.
Also, I believe you can even have multiple hosting options turned on at the same time. Any change in the UI would immediately be pushed to all staging libraries regardless of which embed code option you choose. Only approved and published changes would be added to the production libraries.
Thanks,
Jantzen