I dont have enough mobile to watch this. Essentially no you do not model in a smoothed state. You will however add more edge loops once the base form is done. He is probably using 'smooth preview' which is the 3 key on numeric pad to see what deformation he is achieving.
Cheers bullet
bullet1968
"A Darkness at Sethanon", a book I aspire to model some of the charcters and scenes