More or less, with a high demanding game or GPU application the power draw is at 100%, but the clock is going to be calculated by Power Tune 2.0 to keep the power draw in spec and to keep the temperature below the limit also controlling the fan speed, pushing it to the limit, and in case, reducing further the clock (and the voltage accordingly).
In some cases, the power demand is too high that the clock can't be at the maximum rate, to keep power draw in the limits, Power Tune 2.0 set the clock to a lower value, let's make an example:
Scenario 1 - iMac 5K, M295X, I launch valley benchmark, the GPU receive instructions, based on that, the clock is set to 834MHz (to draw 125W max), the temp rise quickly reaching 96C, the fan goes at 1800rpm, the temp rise again to 100, the fan goes at 2300 (max limit for the GPU controller, only CPU can drive it to 2700), the clock goes to 815, the temp hit 101, the clock goes to 784, the temp goes to 99, the clock goes at 815, the temp goes at 100, the clock goes to 805, the temp goes at 99, etc.
Scenario 2 - iMac 5K, M295X, I launch WoW in low settings, the GPU receive instructions, based on that, the clock is set to 850MHz (the estimated draw is slightly less than 125W), the temp rise reaching 96C, the fan goes at 1600rpm, the temp rise again to 100, the fan goes at 1800, the temp hit 101, the fan goes at 2000, the temp goes to 99, the fan goes at 1800, the temp goes at 100, the fan goes to 1900, the temp goes at 99, etc.
*you can change 101 to 105 or even 108 for the "hot iMacs", the mechanism is the same