Plugin settings are generally saved via the WordPress database.
For example, if you were manually updating the plugin Contact Form 7 via your FTP, your form settings would not be overwritten because these live in the database.
However, if you have edited the core plugin files via your server (this includes style alterations or other code edits), those changes will be overwritten.
If you’re planning on editing the plugin files, you should use hooks and filters within functions.php instead. This means that any customisation won’t be lost when updating the plugin (manually or automatically.
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