Does that also prevent that round from being used for propagation?
ToddL corrected me that it is 2.5 standard deviations (or 100 rating points, whichever is smaller) below your rating. If the round isn't included in your rating, then no, it would not factor into subsequent round propagation either (as only your current rating feeds into the calculations).
Edit: you might be asking about the round rating calculation for that round, itself. That actually uses a totally different method:
The round rating system the PDGA uses is two-pass. For the first pass, the round score of all propagators is plotted against their rating, and linear regression is used to determine the SSA (which is used to determine points-per-throw and thus ratings).
Once initial ratings are computed using the SSA, any round that would rate >60 points below that players' rating is thrown out for purposes of the SSA calculation, and the SSA, points-per-throw, and ratings are all recomputed.
So it is possible that, with a really poor one-round performance, to have that round not count toward the SSA and round rating calculations (i.e. that round isn't treated like a round from a propagator), but still have the final rating for that round count toward the player's (new) rating.. or it's possible that the round might not count for either. Does that help?