Yes, the headtracking does what the mouse normally does, plus special treatment for the roll axis. In most games that means head and body turning are handled the same way, with the exception of some racing games and flightsims that have a dedicated mouselook. Feels a little bit strange at first, but you get used to it pretty quick. Even Carmack did it this way in his Doom 3 demos.
Arma 3 have a dedicated key to look around freely. This game would be awesome with the rift, with all the details, the size of the map, the draw distance etc.