Essentially, yes:
Win a combat by 3 points, apply 3 points' worth of effects – 1x 3-point effect, 3x 1-point effects, or 1x 2-point effect AND 1x 1-point effect etc.
Win by 2 points, apply 2 points' worth (1x 2-point effect or 2x 1-point effects).
Win by 1 point, apply 1 point's worth.
DRAW: both players apply a 1-point effect, with the acting player choosing last.
Ranged combat works in the same way, but with different effects, and with the target only having the option of choosing an effect (weapon jamming, breaking etc.) if the shooter messes up!
Heroes / villains / protagonists may spend a Chi Point to reduce combat effects against them. Chi Points are, however, rather limited, and are often needed to power some of the more dramatic combat effects, so it's something of a balancing act.
The same basic Q/C stats and the activation system is at the heart of AFOKF, but the combat has been tailored to suit the larger-than-life genre and the cinematic combat it demands (both martial arts and John Woo-style 'bullet ballet').