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Neither, nor. This feature just gives Amazon a bit more flexibility for devices to be sold in non English speaking regions, irrespective where they're actually stored.
Each VoiceView language needs around 150 MB - in 4 GB devices it would not make sense to install more than two or max. three other languages.
And I suppose, this could later be made possible via special downloads (or even OTA updates) depending on the respective region (in the possible case of OTA autoupdates you could be right: even on the user-selected language only). So there might for instance sometimes be an update bin for adding a combined French and Flamish VoiceView files for devices sold in or to Belgium...
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