Yes, credit bureaus only see your balance when it is updated by your lenders. Typically, this only happens when your monthly statement cuts, although there are a few exceptions - some lenders are known to do "mid-cycle" reporting when you pay off or for other reasons, but this is rare.
Anyone who pulls your credit can only see what the credit bureaus know. The puller has no access to your individual accounts beyond what the bureaus know, which is going to be your most recently reported information. So if you pay off a card to 0, and it reports 0, then you apply for something and get pulled, that puller sees a score and report based on the 0 balance even if you maxed the card out in the meantime. The maxed out card, if not paid, will lower your score once it's reports but the puller won't know that unless/until they pull again. This is exactly why mortgage lenders will pull more than once during the loan process, to make sure they have a complete picture of your credit habits. Most credit card lenders won't do multiple pulls in rapid succession, although they may soft pull you every month to keep an eye on you, especially if you are borderline for approval, or pull again down the road if you ask for an increase.
