It just adds fields to the template... That all.
setup.template.append_fields
A list of fields to be added to the template and Kibana index pattern. This setting adds new fields. It does not overwrite or change existing fields.This setting is useful when your data contains fields that Filebeat doesn’t know about in advance.
These fields do not belong there
There is a limited number of settings...
The dashboard and ILM settings are under there own settings.