First off, the stored EQ settings and whatever EQ’s you apply to the audio are completely unrelated.
That has nothing to do with whether your EQ settings are saved or whether changes you make to the audio are saved.
If “Make a copy” is chosen then Audacity makes a complete copy of the data from the file when first importing the file.
If “Read Directly” is chosen, then when a waveform section is edited, data for that section only is copied in.
As I said, flattening the EQ and applying that flat EQ to the audio leaves the audio unchanged. It does not undo previous EQ changes. If you want to undo EQ, use Edit > Undo Equalization.
If you want to experiment with different EQ’s, you can save a project then Edit > Duplicate the tracks. Apply one EQ experiment to one of the tracks and other experiments to the other tracks. Solo one track only to hear that track only. If you choose Edit > Preferences… then the Tracks section, you can choose the “Simple” option for “Solo” button. This means that only one track can be soloed at a time, so you can then just press “Solo” on the track you want to hear.
Alternatively you can save a separate project for each attempt at Equalization. If you do that, each project starts out containing the file as you imported it. If you make EQ changes but don’t like them, then you can close the project without saving changes. When you open the project again, the file remains as you originally imported it, without EQ changes.
If you choose not to Undo the previous EQ, that is exactly what happens.
Note that you can press Preview in Equalization without committing the changes to disk. Hopefully in the next release or two of Audacity, you will be able to tweak the controls while listening to the effect, before committing the change to disk.
Both those statements are correct.
Wrong - see above.