I imagine it would keep the friends-only setting -- whether or not you set it manually on an entry-by-entry basis or had LJ automatically default to friends-only, the entry has the friends-only security on it. :)

when I brought over my LJ, I set my DW minimum security to private first. it brought over everything as a private entry, even though I had a mixture of public, friends-only, and filtered posts -- just what I wanted! then I set my DW minimum security back to friends-only for all my future posts.