If I switch it off will that mean that I can only restore the whole database rather than either an email or a mailbox?
correct
But if you know how much space a two weeks of Exchange data backups will need (if you want to keep two weeks), and then add 15-20% for growth, you can set the Reserve so that other apps can also use the volume (reserve is space for non-BE data. If you have a 500 GB volume and set the reserve to 200 GB, when Backup Exec goes over 300GB, it will start re-using the IMG/BKF files
You also need to make sure that in the Global Options (Tools\Media Mangement)
1) Either "Partial" or "Full" is selected
2) You have selected "use overwritable media in the target media set before scratch media" rather than "use scratch before overwritable"