Assuming we are talking Unattended - No not correct.
Hence, I don't see where the difference is made (does fit, does not fit).
The HDCD On/Off shouldn't matter, and long as no HDCD encoded album is in order.
The Copy to XX Drive is needed, only for those albums which don't need any kind of conversion. Those who need conversion go there (XX Drive hence RAMDisk) anyway, and not activating this option makes that those not needing conversion (.wav and no HDCD) are read from their Original Location during Playback.
In either case, with Unattended all is done in advance, so if it goes to the RAMDisk it has to fit there.
Peter
