No that is not correct.
The 4.0/stable LTS channel will only track the 4.0.x LTS series of releases, it will not automatically switch to 5.0 LTS. This is similar to how apt will get security and bug fix updates in an LTS release of an OS.
The latest/stable channel will track the latest feature release.
The 4.x/stable feature release channels will be pinned at a specific version, but the channels themselves are only available for a short period of time (for the next 2 feature releases). We don’t really recommend to use this, but it is there for those who want to install a feature release and handle their own updates but don’t want to use one of the recommended ways to pin to a specific snap version.
Have you considered using one of the other mechanisms snap provides for controlling rollout of versions?
Namely Cohorts Pinning, and Snap Store Proxy, which are described in the afore mentioned guide:
It sounds like one of those would achieve what you want by pinning to a snap revision and controlling when that gets deployed (which is subtly different from the original question about targetting a specific LXD version).