Well, the server config only does the redirect on certain conditions:
ServerName
www.domain.com
ServerAlias domain.com
When a request for
http://domain.com/ comes in, the alias says, serve it if you have it. So, it finds index.html (or index.php whatever) and serves it.
If you have a Directory like
http://domain.com/directory/ it will again serve the index.html (or .php/.shtml/whatever)
However, if you have a link like:
http://domain.com/directory when the server does the request it says, hey, directory is not a file, redirect it to the server, let me build the name, and redirects to
http://(ServerName)/directory/
So, if the request that comes in is properly formed, apache will not redirect to the ServerName specified in the config.