You have it correct.
The thing is, that once your browser has the higher resolution picture (loaded, in cache), there is no point for it to download lower quality one, even when you make your window smaller (the point of this is to save traffic).
So if you want to test this, just make your window smaller and THEN load the page (after clearing the cache / or use incognito mode). You will get the mobile or tablet version. Then by making the window bigger, you’ll at some point see your browser switching to higher resolution picture.
Update 2022; Simply use
Ctrl + Shift + R shortcut (for Mac: Cmd + Shift + R) after resize, instead of clearing cache, so that the browser will reload, and ignore cache for current tab till done (In other words, full-reload without losing entire cache).