This is the official manual for the latest Org-mode release.

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By default, code blocks are expanded with org-babel-expand-src-block during tangling. This has the effect of assigning values to variables specified with :var (see var), and of replacing “noweb” references (see Noweb reference syntax) with their targets. The :no-expand header argument can be used to turn off this behavior. Note: The :no-expand header argument has no impact on export, i.e. code blocks will irrespective of this header argument expanded for execution.