Your second sentence is also correct. In daylight if you can use a suitable speed/aperture combination, you can get fill lighting that will slightly open up the shadows and not be apparent.
At night, you can get a properly exposed subject(within limitations of equipment) and very dark background. anything in front of the subject will be overexposed. How much depends on distance between flash etc.
The lens looks like a sensor, but there's no obvious way to turn the auto exposure on or off.