Does "build geometry" improve the accuracy of the original point cloud points or does it just add more points/facets?
Thanks.
Yes. As far as the sparse cloud is built on matched "feature points", it does not have nothing to do with the actual terrain topography but just with some points identified as features because of their appearance in the photos (vicinity contrast or whatever that made them distinctly identifiable for some detection algorithm). You should understand this is just a 2D step
This nature makes them well-suited to provide optimal correlation values and thus are great for inner and outer camera orientation parameters estimation.
If you build geometry you should get a better terrain description even after a strong decimation (now the third dimension matters) to a number of points below the population of the initial sparse cloud.
I wouldn't expect to infer good breaklines from the sparse point cloud but on the contrary you would see them neatly rendered after dense model decimation.
Regards!