It stops broadcasting all the “data” packets, i.e., everything except the new “Estimote Connectivity” packet, which in Firmware 4.x is a dedicated packet we use to connect to your beacon. This way, the beacon can save energy e.g. when the shop closes for the night, but you can still perform maintenance work on it.
And yes, when the light comes back again, for the app it’ll be as if the beacon came back in range, so it should trigger any events it usually triggers when you come in range of the beacon.
Note that with our brand-new Estimote Telemetry packet in Location Beacons, and with the “Uses Bluetooth accessories” background mode in iOS, your app can keep receiving telemetry data (which includes readings from the light sensor) in the background when in range of the beacon “just like that”.