Yes, the inner two tubes stop working.
This was copied from the JP2C manual -
100 WATTS/60 WATTS (Half Power Switch) This switch allows you to cut the Power from the output section from the full 100 WATTS (switch up) to approximately half power, 60 WATTS (switch down), for lower volume, increased clip or smaller venue applications. This is accomplished by putting two of the power tubes in a “standby” mode where the flaments are still on and kept warm, but high voltage is prevented from getting to them. This reduces overall power by approximately half, resulting in a total (RMS) power rating of approximately 60 watts. Don’t expect huge changes in volume when selecting the 60 WATT position… remember the output tubes are still be-ing shoveled current quickly by the massive output transformer. So even though the wattage is less by nearly half, the urgent attack and bold punch delivered in this power mode is still quite impressive. The biggest difference you notice may be in the form of slightly earlier onset of clip in Channel 1 for Clean sounds, an increase in overall brightness and a slight scoop in the lower midrange fullness.. In other words, brighter, easier to push, elastic/bouncy feeling and a little more stripped sounding.If you prefer the sound and feel of the 60 WATT mode, by all means, leave it set there. It won’t hurt the amplifer and you can even swap the tubes, rotating the two pairs in and out of service to increase the interval between re-tubing (power tubes).NOTE: To achieve the full 60 WATTS of power and a better overall sound, move the Speaker from the 8 Ohm SPEAKER Output jack to the 4 Ohm SPEAKER Output jack. This scenario sounds bolder and punchier and puts a more correct load on the Output transformer when in the 60 WATT power mode. If you prefer the sound with the Speaker still connected to the 8 Ohm SPEAKER Output, feel free to leave it there, but realize your overall power will be lower and the sound may be a bit “slower and looser”, have less punch in the midrange and be a bit darker on the top end. Some players prefer this mismatch, especially for more vintage inspired sounds and it is acceptable to use the amplifer this way.