Does Exclude PIP Window hide the preview from OBS or screen sharing?

No. Exclude PIP Window excludes the Picture in Picture window from BetterDisplay's own capture of its source display. It is useful when the preview sits on the screen it is showing, where capturing the preview again would create a repeated image.

The option does not configure OBS, a meeting app or another screen recorder. Those apps choose their own capture sources and exclusions, so a full-display recording can still include the visible PIP window.

In the recording or sharing app, choose the specific window or display you intend to share. Keep the PIP on a different, unshared display when appropriate, or use an exclusion feature provided by that app. Check that app’s preview or a short test recording before sharing. BetterDisplay’s exclusion setting alone does not hide the window from another app.

The dedicated recording desktop tutorial keeps the PIP on the physical workspace while OBS captures the separate virtual display, then checks a local recording.

See Picture in Picture for BetterDisplay's capture and preview options.