I have a ton of resolutions built up over the years that are no longer valid. I want to delete those values from the resolution drop down, but want to know what that will do for the issues that used that resolution. Will it ask me to move those to a new resolution?
The long version: That's a good question, and I don't think the docs really explain it at all. The shortest way to explain this is to say that "the properties are only read at run-time". This means that the property is passive, it's only read when an issue is going through the transition so that Jira can put the right list of resolutions on-screen for the user.
The property will have no effect on old issues. It will only kick in if you re-open and then re-resolve the issue - at that point, it wll demand you select from the currently available list, you won't be able to select the old excluded resolution.