Yes, it will not remember any passwords.
But there are only few apps that try to use kwallet, many others don't, so for me, kwallet itself is rather useless.
Just out of curiosity, I enabled kwallet and tried login to one site in Konqueror. Dialog pops up if konqueror can access kwallet once, always or no and never no.
I tried once. Entry appeared in applications section in kwalletmanager. So I closed it and run again, pointing to the site. Sure enough, it popped up again, because I chose "only once" option. So I chose "always" this time.
Now after closing, Konqueror appeared in the authorized apps in kwalletmanager, as expected.
So I run Konqueror again to see if kwallet pops up, and, as expected, no, it keeps silent and password is remembered.
I'm not sure how much annoying it is. If you click "always" in the pop up, the app should never bother you with kwallet again.
But for me, the fact that OS keeps passwords in one place is more annoying actually, so I never use it.
If the app to use some passwords is not needed e.g., so must be the password. This one-place-storage of such data is just not for me.