Vanguard Dividends Question

I own VTSAX in my taxable accounts and it pays out a quarterly dividend. In my 401k also through Vanguard I have the “Vanguard Institutional Total Stock Market Index Trust Fund”, but it doesn’t pay quarterly dividends as stated by Vanguard “There are no distributions to date for this fund. Dividends and Capital Gains remain in the fund are reflected in the NAV rather than being distributed and reinvested in additional shares of the fund.”

This is confusing to me as it doesn’t seem to pay a dividend or reinvest the funds. Does the price of this fund just go up faster than it otherwise would if it payed a dividend?