Noise reduction can be done while imaging and also on previously acquired images, even ones taken months ago. It does no stop the imaging, after waiting the 15 seconds you have the option of saving the result or not, and then you return to image acquisition, which is not affected in any way.
I think the processing happens in the phone, not in the S50. ZWO wants to prevent this feature from being used on non-S50 images, which is why you can only use it on S50 captured images and you have to copy it back into the S50 if you already archived it, which is a pain.