Yes, the mount should be tracking, although the only difference is that it's easier to centre a star at high magnification (if you weren't tracking the star would drift out of the FOV pretty quickly). When you SYNC or click [Accept] button, EQMOD uses the current ring counter stepper values and that has nothing to do with tracking being on.
There should be no concern about the time it takes you to slew the alignment star to the middle of your FOV.
Measurements are made right after the SYNC or [Accept] align button is clicked. It is not a problem if it takes a long time to zero-in (center) on the alignment object. Once the SYNC or [Accept] button at the alignment window is clicked, EQMOD will read the current stepper values of the mount (RA and DEC) and compute what the stepper values should be on the catalog object at this precise moment based on the Local Sidereal Time (LST).
These four values (mount RA ring counter, mount DEC ring counter, catalog computed RA ring counter, catalog computed DEC ring counter) are then stored as a N-Point entry in the N-Point in-memory database.