Unfortunately no, it wont reduce the amount of keys in the output.
The setting will only change the associated address derived from each private key, the number of private keys in your wallet remains the same.

As you can see in my example, the WIF private key is the same (in testnet, the ones starting with "c") while the address changes depending on the setting.
Legacy Bitcoin Core can derive three address types from your private keys, the setting just let you pick which one to associate with the private key in the dump file.

On the contrary, since you don't know which address has balance, you may have to dump three separate dumpwallets, each with different address types.