Correct. By setting the interface to display as unplugged it shouldn't trigger the down interface alert (assuming the trigger is "Interface status is equal to Down" and not "Interface status is not equal to Up").
On the web console, the down interface on the switch will show as unplugged.
Depending on the reset condition (default is status = up), you may have to go clear out the individual alert in the alert manager (Open Advanced Alert Manager on the server, View -> Active Alerts, click the X next to the individual triggered alert). You could disable/enable the whole interface down alert itself but it will retrigger for all interfaces that are down.