The client only offers an "install game" option, no "download" option. Does that mean the game gets insta-installed, with no backup of the downloaded file(s)?
Yes, that's correct. You have to download backup files the old-fashioned way.
This, combined with the fact that the client only recognizes very few installations done via the old downloader, makes the client somewhat superfluous at the moment.
Yeah, but no, dudes, make your homework before codexing the shit out of Galaxy
1 You can use Galaxy to download the standalone version : just go to your library, click on any game, click on Download More, click on extra, click on the game,... This is it. Though, right now, I've had shitty download speed with that, but it will be fixed down the line.