No. As of early 2024, Google Play System Updates (Mainline modules) are no longer controlled by Android Enterprise system update policies.
Previously, the system update policy applied to both OTA system updates and Google Play System Updates. This is no longer the case - Mainline updates now download automatically in the background and install on the next device reboot, regardless of any configured system update policy, freeze period, or maintenance window.
This means:
Administrators can still use compliance policies to check that devices have current Mainline modules installed, but cannot directly control the timing of their installation.
OTA system updates (full Android version upgrades and monthly security patches) continue to respect system update policies as before.
For more details, see Google Play System Updates and Android Enterprise.