Does stopPropgation stop the event from propagating in the capture phase?

Short answer: The order is:

1. Capture (down)
2. Target
3. Bubble (up).

If you call e.stopPropagation() in the capture phase (by setting the addEventListener()'s 3rd argument to true), it stops at 1, so 2 & 3 cannot receive it.

If you call e.stopPropagation() in the bubble phase (by setting the addEventListener()'s 3rd argument to false or just not assign it), the 1 & 2 already complete, so it just prevents the event from bubbling up from the level where you call stopPropagation().

No, an event listener doesn't stop any events from propagating, unless you explicitly tell it to. The part you're referring to deals with the bubble phase specifically. IE's model doesn't support event capturing - full stop. the capture phase is what precedes the bubbling phase:

Top of the DOM --->event--->traverses--->to--->[target]+[event]-| (capture phase)
      /\                                                       \/
      |------------------------to--------back up-----------------  (bubble up)