Yes but unlike till 2005 it does not do dynamic highlight in large assembly mode.
Just open a big assembly or set large assembly mode and you will
see that dynamic hightlight will not work!
Till SW2005 it did work and you could set it on or off in large assembly mode.
Find the picture of the Solidworks answer.
The answer however is not a solution, it seems like they just forgot to test it.
Lightweight mode does not fix dynamic highlight in large assembly mode.
When large assembly mode is on, dynamic highlight just does not work
anymore after SW2005 and lightweight mode doesn't matter
Solidworks answer.png 19.5 KB