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Form submission behaviour?

Hi, would anyone be able to help me out and provide me with some clarification on form submission behavior.

Let's say I have a form on my website, providing people with a way of letting me know they are interested in my new service. The form will capture information about the person (name/company/email address...), and also info about how they plan to use the new service. There are two kinds of people who might fill out this form, people we already know, and people new to us.

If someone who we don't know submits the form, a lead will be created, and as far as I understand we can map the information they provide to custom fields on the lead entity.

If a person we already know fills in the form, the posted form will be associated with the contact record, but can I check, will a lead also be created and associated with the contact record?

From what I've read, my understanding is that CD will either create a lead, or update a contact. This is not the bevahiour I want and I'm hoping I'm just misunderstanding what I've read.

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