yes it does.

if i loan you 100. in my head i have 100 of assets coming to me, and you have 100, so the system now has 200.

if you default, "so sorry throwaway you ain't seeing it", i have to write down the expectation im getting that 100 back. which means that i have 0, and the 100 is out in the system, spent. the system now has 100.

it is the case that some people refer to things like bailouts and inflating away your debt as soft "defaulting" but those are special cases and not the general case.