Yes, the "matched" users will continue to have access to all Microsoft 365 services. The process can potentially overwrite attributes that are relevant to some services (i.e. the set of email addresses assigned to the user), but does not directly affect any content the user has access to, be it in his mailbox, OneDrive, SharePoint Online and so on.
Still, it is always a good idea to review and compare the attribute values between your AD and Entra ID users in order to avoid surprises. For example, if the user's UPN changes, this will affect how the login to M365 services, so you definitely want to inform the user.
As for your local AD users, there should be no issues. The synchronization process is one-way only, from AD to Entra ID. There are only a handful of properties that can be written back, and those require additional configuration (optional features) to be enabled.