or is it reloaded anew every time the Preferences dialog is re-opened?

Yes, in function prefs_init_dialog() in file prefs.c the dialog is synced to the global value:

gtk_toggle_button_set_active(GTK_TOGGLE_BUTTON(widget), project_prefs.use_project_session_files);

Also, the Workbench plugin is only temporarily setting the value to FALSE and then restores the old value.

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