If people set preferred groups, will they generally not be scheduled for any of the other workgroups they are members of?

If a preference is set, the system only considers the user for the preferred workgroup(s).
On the other hand, if no preferences are set, then the system considers the user for all workgroups that have his/her skills.

When users set preferred workgroups, they are only considered for those preferred workgroups even if they have other skills that would normally make them eligible for other workgroups. This feature allows users who are normally eligible to be schedule for multiple workgroups, to specify the ones they would like to be scheduled for.
When the auto-scheduler runs for a workgroup, it considers those who have specified preference for that workgroup along with those who have not made any preference specifications at all. Basically, it just looks for all users who have the specified skill for that workgroup.
If a user sets a preference for either a workgroup or activity, he/she will only be considered for that workgroup or activity.