Fiddler itself doesn't have any kind of request/response cache (except, arguably, the AutoResponder).
As documented, Fiddler's "Disable Caching" rule simply does what the text in blue says-- it sets up request and response headers to help prevent a client from caching a response and to prevent a server from returning a cached response. This rule's effectiveness is, of course, predicated upon Fiddler actually seeing the request. If you failed to clear the browser/client's cache first, for instance, a request could be loaded from the browser cache without the request ever being seen by Fiddler at all.