Password Schemes

My /etc/dovecot/conf.d/auth-passwdfile.conf.ext is configured to use MD5

passdb {
   driver = passwd-file
   args = scheme=MD5 username_format=%n /etc/exim4/domains/%d/passwd
}

userdb {
   driver = passwd-file
   args = username_format=%n /etc/exim4/domains/%d/passwd
}

/home/account/conf/mail/domain.com/passwd has a mixture of MD5 & SHA512-CRYPT:

scanner:{MD5}$1$M5QuU7QI$AE7Nnorb8KC5KMvyYfVcr0:account:mail::/home/account:0:userdb_quota_rule=*:storage=0M
test:{SHA512-CRYPT}$6$towo0IVjzBgZ0htU$uTFbyJ3aPunrhsEEC2alHz6SEuPyBdL3JYDWc6Z0ZtA2cMFjFVJNqAwn04OKQfsu99DNcDGu21zkvdYbsPmgJ0:account:mail::/home/account:0:userdb_quota_rule=*:storage=0M

Everything is working fine, is this by design? In other words does the {MD5} vs {SHA512-CRYPT} in passwd over-rule auth-passwdfile.conf.ext ?

-- John Schmerold Katy Computer Systems, Inc https://katycomputer.com St Louis