Question How does maintain target offset work?

How does the "Maintain target offset" property work for say the 2 bone ik constraint?

More precisely, if I use the option of "position" how will the offset be determined?

Is it determined upon entering runtime, as the difference "target - tip" ? So for example, does it use the position of the character in the first frame of the default animation in the default layer? It seems like that's not the case, and that it simply uses the difference "target - tip" of the character, when in the normal scene edit mode. Is that the case?