No, it's a vacuum activated valve. During normal driving, it stays closed and all air is pulled from the filter. If the filter were to go submerged under water, it would pull a hard vacuum inside the tube which opens the flaps on the bypass valve. In this situation, the engine will pull air from the bypass valve instead of sucking up the water.
It works. Sport Compact Car Magazine did a test on it a long time ago where they ran an intake from an NSX into a fish tank of water and did dyno pulls. The car survived unscathed.
The article explains just about everything you need to know about it:
http://www.modified.com/tech/0104scc_aem_air_bypass_valve/index.html