For a PDF, no it won’t create a new document. For images, logically it will as an image is not a PDF. One format in → one format out. Simple.
That way I can even address existing files and not move them to an altogether new group.
I’m not sure what your intention is here but you need to make sure the result is no longer matched by the smart rule. In my example, the added tag accomplishes that. However, a Move or File action can be used to remove it from the targeted group.