Negative. 'Server mode' means that the database is not stored in a single file, which when it becomes too big consumes the full memory of Openfire, is slow to access etc., but it splits to multiple files
server.database.1 etc. for faster access, like all other DBMSs are doing. As the links I provided show, it is a configuration setting of HSQLDB, but these must be setup in Openfire to make HSQLDB work in server mode. There are other modes, e.g. web mode, etc.