They will indeed soften the axle up but whether this will “loosen” or “tighten” the kart up depends on a whole host of other variables.
I almost always run medium hubs, regardless of grip level or track conditions.
Hub length changes are pretty small adjustments. You can get the same reaction from the kart by changing a ton of other stuff too so that’s why I never mess with hubs; I never really need to because there are plenty of other adjustments. I also don’t like how long or short hubs feel but that’s just my personal preference. For me I feel like they change how the tires react to the track surface with axle flex.
My recommendation would be to go with medium hubs and just adjust track width with those to get softer or stiffer in the rear, along with your third bearing adjustment and axle stiffness.