Hopefully not.
Jenson is smart enough to recognise if Honda are not likely to have made any MAJOR steps forward for 2016.
His choice was retire or stay as is. It was a Mclaren option not his. He didn't go "hey the engine is looking great for next year, I
want to stay". It's a case of "well Ron will sue me if I try and do other racing so it's retire or get paid £12mil to stick out the contract I agreed to.... so retire fully or stay put".
Who cares that he's staying, it's in no way a sign that Honda will be competitive next year, it's highly unlikely they will be. Improved, you would hope so, enough, meh. I think what is most likely going to happen is a fairly large step forward in performance but still suffer from reliability that rules them out of being realistically competitive.
They chose the wrong engine design, that can be fixed, but unlike Ferrari who went with the wrong design Honda didn't have the reliability. They have said as much that their in house testing wasn't finding all the faults that the engine produced on the track. Their testing is insufficient, that makes me believe that a engine of the right design will still suffer from reliability issues.
Proper testing in the lab means coming to the first test with a near flawless engine which only needs to be made to work with that years car, electrical faults, crossed wires, overheating electronics, melting cables and finding fixes for all those things.
Look how bad reliability is on the honda and how long it took them to improve it only a small amount, Renault with an unreliable engine and they still haven't brought their updates. These engines require extremely long development cycles, you can't find major problems in the first test and have them fixed by Australia. If you find a major problem in testing you won't fix it before Spain at the earliest. Mercedes had a reliability issue that prevented them using their highest mode and that didn't get fixed till Canada. Renault had a relatively simple piston redesign and that took 2-3 months and they stated at the time it would be 6 weeks minimum. Honda brought a significantly less reliable update to Canada.
If Honda are failing at the testing in the lab stage, then they will almost certainly find a lot of reliability problems when they hit the track and as above the fixes for those problems won't come quickly.