Do scheduled transfers lock up the funds in the sender account?

As per the title - I am unsure of whether a scheduled transaction will lock up the specified token amount in the sender account, until the tokens are transfered?

If not, what happens when the scheduled time rolls around, is the transaction simply cancelled, does it fail?

Scheduled transfers are sent immediately to the receiver account (and leave the sender account), but they are locked (i.e. cannot be spent, although they can be used for staking as a baker) until the scheduled time. The primary purpose for scheduled transfers was to provide some control over liquidity when CCDs are distributed to initial stakeholders.