Yes, the supervisor password is to protect system settings. It is stored on a (EEprom?) chip on the motherboard.

In the old days you could circumvent this by shorting out some of the pins on the eeprom chip and clearing the password.

That won't work now, as you would also wipe data essential to booting the machine. Hence the requirement to replace the MoBo.

AFAIK, the HDD actually has two passwords: the master and user. If you lose both of those you need a new HDD or pay to have it reset.

I suppose that if you were a skilled electronics engineer with the right equipment you could get round it, but it would probably take some time, which is all security buys you in the end.