There are two types of BIOS: non-Plug and Play BIOS and Plug and Play BIOS.
Computers that are not Plug and Play enabled behave as always. Plug and Play ISA cards that have option ROMs should power up with the option ROM enabled only if the ROM is actually required for proper functionality, for example a Plug and Play SCSI card which needs to boot from one of the attached hard drives. If the ROM is enabled and the device is active when Windows 95 protect mode initialization begins, that Plug and Play device will be treated as unmovable for purposes of resource allocation. This is because real mode drivers may have been loaded for the device in Phase 1 which would be unable to handle a shift in resource allocation. The phase 0 boot process for an old ROM acts exactly as it always has.
Plug and Play enabled BIOSs will access non-volatile RAM to determine which Plug and Play ISA cards should be enabled and where their option ROMs should be mapped, and what I/O, DMA, and other assignments to give to the card. The BIOS will then program the Plug and Play cards prior to the power-on self test (POST). All cards that do not have a configuration stored in the BIOS will be disabled completely, eliminating the chance of a conflict.
The Plug and Play BIOS will also configure all devices on the motherboard. Some devices may have been disabled or assigned to different I/O, IRQ, or other resources by Configuration Manager.