Neither. The light component allows you you to edit and save the octane side of the light. For instance it allows you to turn a spotlight into an IES lights.
Octane is an unbiased renderer, which means that the inverse square law is an emergent property and not directly coded in.
This is an difference between octane and unity that is hard to bridge, as unity does code their light drop-off into the engine.
For the automatic conversion of lights we match the light intensity at 75% of the unity light range.
This means that everyting closer than 75% of the unity light range will be brighter in octane, and everything farther than 75% will be darker in octane.