Yes, that is partially what it does. Blender will not divide your model up for you. You have to go into the model yourself and define the edge "seams" that you want. After that Blender will take the seams you defined and divide the model up in the UV Editing Window.
Im havent really messed with UVW unwrapping so I hope this doesnt sound weird but does blender essentially break youre UV's up into larger more recognizable pieces instead of having to weld tiny pieces together using other unwrapping methods like "box" or "planar"? I havent heard of the term "pinning vertices" so my…