A component that is annotated with BypassInterceptors will not have access to any of the services that seam provides using intereceptors, such as bijection and transaction management. The main reason for using this is to improve performance.

Does this include bypassing initialization of the component itself inside components.xml?

Java source:

package com.example;
...
@BypassInterceptors
public class Foo {
    public void setBars(List<Integer> bars) {...}
    ...
}

components.xml

<component name="foo" class="com.example.Foo">
    <property name="bars">
        <value>1</value>
        <value>2</value>
        <value>3</value>
    </property>
</components>

Would using @BypassInterceptors make my component be populated with bars={1, 2, 3}? Or would this be skipped?

That will still work, as components.xml values are set at creation time, unlike injected values.