Eh. I've seen people interpret it like that but I kinda disagree. In order for this Plot Hax to actually intervene in a match:
1. The character's "story arc" would need to be unfinished when the match is set. And in a lot of cases we'd assume the version of the character used would be after their respective story is done anyway.
2. The character losing would mean their character act is left unfinished. Which doesn't have to be the case. Death to a character stronger than themselves can be a reasonable way for a character's arc to end. In fact, several SCP protagonists end up dead by the end of their series.
3. The character's arc can't be completed after a loss by our standards. The character could be resurrected, freed from the BFR or whatever well after our condition of victory for the match and then have their arc completed. Or simply have events after their death complete their arc.
And even if all of those were true, we don't know how far the Plot Hax can twist the plot (without direct author intervention, which isn't part of their power set) in order to make the Protagonist win. So assuming things would somehow prevent them from losing to something trillions of times stronger and faster than themselves is sorta dumb. Arguably this plot hax would have prevented the match from occurring in the first place but it did anyway, so.
I'd say that this plot hax would make things fall in their favor, but only within the realm of possibility. IF the above 3 are true, then they'd win if it's reasonably possible for them to win. But if it's just impossible then nah. But you could easily argue the above 3 aren't true in a given matchup.
