How this works in Android for system apps: One can only disable a system app. This disable button replaces the uninstall button. It deletes any updates to the app from your phone, since it will obviously still have the original version baked into the ROM, and removes it from the app list. It might also disable any service registrations for the app... Unsure on whether that's true.

Re-enabling the app will basically restore the ROM version. You can then install updates from the store, which I think is basically a full install and the ROM version is ignored again, based on the consumed space of such apps.