In Krita I can select a color profile when I create a new image, and I can select a color profile in settings.

The way I imagine that this works is that the profile you select when you create an image is the true color profile that the image file will use, whereas the color profile I set in the settings after creating the image will set the color profile that krita uses to display the image to the user regardless of what color profile the image file is in, and this I assume will not convert the image to another profile when saved, am I correct?

Wut? No one knows

Ah, sorry.

We wrote up a whole lot of text on the subject here:

https://userbase.kde.org/Krita/Manual/ColorManagement

Basically, the profile in preferences is what describes YOUR Monitor.

The profile of the image is a working space profile and describes an ideal in which you create and manipulate contrasts.

I hope this is of use to you!