Basically, all your Android services are restarted; those that are created and registered in SystemServer.java. This is called within the “Context of Zygote”. So yes, Zygote is stopped.
All your services registered with ServiceManager in Android will get removed within ServiceManager. To restart them, do adb shell start.
Also note that SystemServer is started by Zygote, so init.rc tells that if Zygote is stopped, then even SystemServer must be stopped. Even SurfaceFlinger dies, since it’s started from SystemServer but natively.