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Yes, correct.
If you do the workflow in 8 bits each time you make an adjustment there is compromise, some data is lost (less than 256 smooth levels per channel left). Eventually you have posterization!
It is best to do the workflow and saving your master file in 16 bits (.psd best or .tif), then when you wish to print or www it then make copy to .jpg (fill the 8 bit file full, 256 (smooth) levels per channel).
Taken some liberty with explanation ;-)
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