background you mean?
Yes, and they’d still be in your wallet, just changing addresses.
Each time you send or receive a coin right?
That woul be up to the wallet designer, but it’s not magic, there have to be enough participants and inputs to coordinate a successful fusion regardless.
maybe check this out to get the idea of how is your money actually stored under the hood: https://bitcoin.stackexchange.com/questions/63556/is-a-wallet-simply-a-folder-of-private-keys/115830#115830
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