Correct. As mentioned though, that is different than how a Follow on the download file itself will only notify you of comments/reviews. If you want File Updates, you would need to opt into that on the file and then need to go to Account Settings -> Notification Settings to set how you wish to receive those notifications. It is not an ACP setting that you need to enable, it's automatically enabled like the Follow System, you only have to opt-in at a user level to receive notifications.
If you want to see the default settings you are providing your users at the admin level, you would do this in ACP -> Members -> Notifications.
The author of a downloads file cannot opt in to receive notifications about updates.