Does the exclusion command just hide the fault, or does it actually prevent the fault from shutting the car down?

I believe it suppresses a recording fo a particular fault but the fault may still occur.ing the
The reason for exclusion is to avoid a record of a fault that is not shutting down the car but may be mixed in with other faults
confusing the situation.

I also use it to get rid of bs faults appearing usually like 141-145 ETS switch not making up exactly where it broke type stuff.
I don't recommend it for anything else though. Also you can download an updated fault list if CEC's site is still up. The newer manuals had it as well as some newer control status word bits that were previously never mentioned.