MO preserves a lot but not everything. It saves the list of mods, the mod priority order, and the plugin order for each profile. It doesn't save the mod files themself for each profile; this would take a huge amount of space. I have several profiles that use different installation options for a few of the mods (e.g., a STEP Extended profile that uses Skyrim Flora Overhaul basic (1.87) and another profile that uses the most recent version of Skyrim Flora Overhaul (2.5b)). When this happens I save different versions of the installed mod, each with different installed options to use with the associated profile. Each different version has with a different name (e.g., SFO Basic and SFO 2.5b, and two different versions of the DynDOLOD files).
Same. I multiple installation of several mods for different profiles.