Scripts Resource Localization at Server Level and Understand

Hi everyone,
Does anyone has any idea on the following works?

Under Pages>> Script Manager >> Enable Script Localization
Indicates whether the ScriptManager control renders localized versions of script files. Applies only for frontend. Does this means that if this is Enabled? All the JS files that Sitefinity uses for its Webresources (eg: jquery/ajax and others) will be localize in the server? Where are the localize files?

Script Manager > Script References
Taking the MicrosoftAjax as an example. It can be seem that the path is ajax.microsoft.com/.../MicrosoftAjax.js.

Generating the Telerik webresource axd file. Does Sitefinity  grab from MS server/KendoUI libraries and combine them to generate the webresources? Is this done on the fly /everytime a page request or pre-generated?

Hi anyone from Sitefinity is able to answer this?