Yes, that is correct. If the public prosecutor agrees with the defence that there is no risk Otegi will flee, he won't go into prison.

That was exactly the reason given to allow him to go free on bail last time, and the reason why the previous Audiencia Nacional prosecutor was relieved of his duties.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman