A handful of notes:
- Your first screenshot above is not for co-management, it's for tenant attach. With Tenant attach. the MEM admin console becomes another management console for your ConfigMgr site exposing a small subset of functionality to admins. Tenant attach is not client OS specific and thus you can actually manage servers from the MEM console. Keep in mind "manage" here is simply a limited subset of overall ConfigMgr capabilities exposed in the MEM console and not Intune management capabilities.
- Co-management will only apply to systems running Win 10 1709 and above so even if you include other systems in your targeted collection (or use All as you have in your second screenshot above), these other systems will be ignored are far as co-management goes.
- Co-management does not move management from ConfigMgr to Intune, instead, it enables coordinate management by both on the Win 10 devices. The sliders give you control over this coordination but this is client-side functionality. Thus, moving a slider doesn't disable anything in ConfigMgr itself, it merely instructs the targeted client(s) to consider/enforce policies from Intune (each slider has a slightly different end-effect and result so this is a generic statement at best).
Thus, you deploy updates to servers using the normal processes in ConfigMgr regardless of the co-management or tenant attach configuration.