Yes it will create a child frame and execute it just as another type of CALL (EOA, contract) - I don't see any distinction while executing a CALL operation at the parent level here.
It will call TraceContextEnter and TraceContextExit on the child frame, though on the precompile, the child would take a slightly different code path, instead of going through the EVM code executor. Precompiles seem to be implemented in Java or native code directly and so it will call a TracePrecompileCall event. After it has finished the proper ending state is set back CODE_SUCCESS, HALT and it follows the same code path as without precompile.