Yeah, just as when you move, it cancels a cast, it will do the same for your fairy. Placing her will have her cast embrace at a much greater rate since she can keep recasting without distraction, but she'll also blow her other spells at weird times. She also has MUCH higher defense than you, so you really don't need to micromanage her health to the extreme that you do your regular team mates as you learn the class.

Though, remember to call her back! She won't come back to you after you finish the battle!