Continuous Dynamic Collision - what it affects?

Hello!

I have been wondering: Does the Continuous Dynamic Collision detection affect only the Physics based movement (like by adding Force, Velocity etc. directly to Rigidbody) or does it affect "all" rigidbody movement (through Animation movement or direct Transform Position changes, like Lerping ).

I'm trying to make an accurate Sword fighting and I'm looking for a way to make swords clash and deal damage to limbs, so I've got fast moving objects, which need to detect collisions and I don't know in what situations I can trust the Continuous Detection.