Question about circuit wiring

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Buying a Honda EM6500 generator soon for home backup power and I'm looking for a transfer switch. This APC UTS10 unit seems pretty slick, buy I'm confused about how it gets wired into each house circuit. With a manual transfer switch, you're moving each circuit breaker over to the transfer switch and your new switch supports those circuit loads forever more. But looking through the UTS10 manual, it doesn't seem to work like that. Could be wrong, so I have some dumb questions:

Are the circuits on this thing bridged directly to existing panel breakers?
So, under normal utility power, the existing breakers are part of the circuit and the hot wire passes through the UTS panel back out to the load side?

Depending on the answers to those questions, I think I'll have a few additional, dumb questions. Thanks!

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