Setting my profile activity level

Ok, I am going back to change some things in my profile (upping my calories above BMR and to -20% TDEE), but I noticed that MFP asks both your activity level and how many times a week you intend to work out. My question is, does it then take your intended workout and factor it into your needed calories? Or is it just there as a goal reminder?

Concerning the TDEE -20%. Obviously TDEE changes each day. Do I just go ahead and eat at an average TDEE and not eat back my exercise calories?

Any help would be great.

Thanks.