It will not follow trunking in waterfall mode, but it will decode individual digital and analogue channels. If the waterfall window is greater than a certain bandwidth (or "span") of 2.88 MHz, you have to hit "Hold" to hear audio. If less than that, it'll let you hear the audio automatically. (Also, squelch is normally set to 2.)
Also, the only digital signals it'll decode are those it understands, including the modes you bought the keys for.
And, for what it's worth, there are conventional (non-trunked) P25, DMR and NXDN signals out there. (The only trunked signals it should understand in waterfall mode should be OFT (one-frequency trunked) or individual audio frequencies in a trunked system.)