According to my experience using FMA Copilot, yes it keep the wing level with ailerons and the plane level with elevator. When you use the rudder instead of the aileron, it do not control the yaw... it do the same work than the ailerons, the rudder work to correct the plane if it bank and keep the wings level.

On a twin yes it will help to avoid an inverted spin for a while sure by keeping the wing level but to help going strait... I will go for a gyro being able to control the yaw... because you really have a strong yaw when loosing an engine. It may be a few seconds more of control the time to notice what is going on. What the gyro will do after the first yaw move is done, the correction is apply automatically but I don't know if the gyro will keep the rudder full reflexions if not in heading hold mode... I don't think so... Never experiment it... but sure will help to keep control of the airplane for a while, giving you the time to slow down your heart beat, knees knocking .... and may be having time to throttle back an trim the plane a bit...