If you turn that off, it means the app itself will not put things in your notification bar. Actual app update, as in newer versions, notification is handled by the Play Store app.
Edit: If you use auto-updates, you'll get "<Appname> is updating" and "<Appname> has been updated" notifications, but as I mentioned above, these are controlled by the Play Store app itself. I think you can disable notifications from the Play Store and still have apps update, but I don't know what it does for the in-progress notifications.