Yes, although maybe not the way you’d expect. In the scenario you describe the update is stored in %AppDataLocal%\CiscoSparkLauncher and used at runtime by CiscoCollabHost.exe in c:\Program Files. The ALLUSERS=1 install (files and registry) is not updated, so your SCCM reporting will not show an updated version has been installed, but the auto update mechanism will work. This also means that each user has to update separately on shared workstations.
The Cisco Live session Deploying the Webex App to your Organization - BRKCOL-2198 recording/presentation will have more detail.
PS- The AUTOUPGRADEENABLED parameter only works in VDI deployments; it’s always on for a traditional Windows machine.