There are two types of password-based security policies you can apply to a PDF in Acrobat: A file-open policy, which only applies when the file is opened and doesn't restrict it from being edited in any way.
The other type is a file-edit policy. This policy allows you to define some types of editing that are allowed and other which are prohibited. For example, you can allow the filling in of form fields, but the extract of contents (such as text and images) and printing the file.
Both policies can be applied on their own, or you can apply both. They are independent of one another.
An important side-note is that the file-edit policy is much more easily removed by third-party tools, but any Adobe application will respect either one you apply.
PS. I moved your question to the Acrobat Security and Digital Signatures forum, where it better belongs.
PPS. I see that you already posted this question here, so I'll lock this thread...