Deleting sidecar files works as expected. By default it deletes .XMP and .THM files, but you can add others, for instance .PP3 (Raw Therapee). You can even add .JPG files, but I would be careful with that (please remember ...), since they are usually not sidecar files, although sometimes they are; LightZone can use small _lzn.JPG sidecar files, where editing information and preview picture are stored.

This option - delete sidecar files - does not affect browsing, as far as I know.