Session time outs only occur when the user doesn't do anything for the specified time window. If a user is "happily working" in salesforce, they're doing something, and so they won't be timed out. If they go away for a lunch break, they should come back to find that their session has expired and they must log in again.
Note that it is possible for developers to define code that allows a session to stay active indefinitely. For example, if a developer were to put an actionPoller in a Visualforce page, and the user walked away, their Visualforce session would remain active as long as that page was open. When possible, developers should avoid writing code that may make an otherwise inactive session remain viable.