Is there a difference between debug on hardware and run on hardware?

Hello all, I have started a course on Embedded system design using the nios II and a de-2 board. We are provided with the following code:

#include <sys/alt_irq.h>               // for irq support function# include "system.h"                    // for SOPC defines
/*============================== Integer Types ===============================*/
typedef   signed char   sint8;      // signed 8 bit values
typedef unsigned char   uint8;      // unsigned 8 bit values
typedef   signed short  sint16;     // signed 16 bit values
typedef unsigned short  uint16;     // unsigned 16 bit values
typedef   signed long   sint32;     // signed 32 bit values
typedef unsigned long   uint32;     // unsigned 32 bit values
typedef         float   real32;     // 32 bit real values 
//*****************************************************************************
//                  Define symbolic constants
//*****************************************************************************
//*****************************************************************************
//                     Define private data
//*****************************************************************************
int main(void)
{
  // red_leds is a pointer to the R_LEDs
  uint32 * redLedsPtr = (uint32 *) RED_LEDS_BASE;
  // switches points to the switches
  volatile uint32* switchesPtr = (uint32*) SWITCHES_BASE;
  while(1)
  {
    // set the LEDR equal to SW
    *(redLedsPtr) = *(switchesPtr);                
  } /* while */
  return 0;
} /* main */

when run each switch turns on each corresponding led on the board. I then removed the volatile keyword and rebuilt the project, however it still runs perfectly on the board. I would have expected the compiler to basically optimize away the contents of the while loop. I have two questions, if no breakpoint is set in the code is there a difference between running it normally or in debug mode? Is there something I may be missing as far as getting the rebuilt program code loaded on to the board? I have been using quartus for the last year targeting the de-2 board for previous courses but this is my first time using the nios eclipse IDE. Any help would be appreciated, thanks.