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Yes. The only content that is permanently compiled is the official content released by LWD. All user created content, whether created in the editor or with the authoring kit, is re-compiled every time you reload the game system.
This is why one of the earlier comments suggested you make your changes with Hero Lab closed, but you don't even have to do that. When I make changes, I go to the File menu and select "Switch game system", then just reload the same game to see the changes I've made.
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