Hey hey! To test this, I created an account where the MX record was pointed to mail.domain.com, and then setup an A record for "mail" to point to a random IP address. I did confirm that the custom record was moved.
Whether or not Live Transfer is selected should not have an affect in how the DNS zones are handled, as the "Live" option just adds proxies to the Source to deliver to the Destination. This way, now DNS propagation needs to happen in order for sites and email to stop working. According to our details at Transfer Tool | cPanel & WHM Documentation
we just tweak the cPanel >> Email Routing setting to ensure that mail doesn't get delivered locally to the Source machine. I further confirmed this by checking the /etc/remotedomains file after the Live Transfer had completed, and my transferred domain was listed in there.
Let me know if that answers everything you're looking for!