Yes they will. You have to read the paragraph with clarity. If they weren't going to then it would be READ LIKE THIS:New Update from CIC, not know if they will process for PR Paper based application
https://www.canada.ca/en/immigration-refugees-citizenship/news/notices/ircc-resumes-processing-1-july-2020.html
IRCC also continues to process study permit, work permit and permanent residence applications submitted online, to the extent possible.
INSTEAD OF THIS:
IRCC also continues to process study permit and work permit applications submitted online and permanent residence applications, to the extent possible.
PLEASE NOTE THE DIFFERENCE BETWEEN THE TWO SENTENCES.