That’s exactly what it means. You’ll be able to set color, brightness, etc on a per-LED basis, and several of the notifications work with a subset of LEDs as well. So maybe you want the bottom 3 to pulse while the top 3 are solid and the 4th in the middle is off, you can do that. Or maybe you want to go red/white/blue or sports team colors on your light bar, you can do that too.
The only caveat here is that with the existing diffuser some of the lights will blend a bit, I think 4 separate colors fully lit on 1/3/5/7 was decent, or 1/4/7 if you’re dissatisfied with that.
Edit to add a short clip as an example -