Just to clarify, we've been discussing three different, largely independent concepts:

1. Development vs. production build. The ant task you choose (ant build vs. ant production) solely determines the kind of build you produce. IntelliJ knows nothing about compiling development vs. production builds.
2. Development vs. production mode. Running a build in development mode enables dynamic re-compilation of JSP files, loading various resources from the source location, enhanced logging, and other conveniences for developers. Choosing an IntelliJ run configuration ("LabKey Development" or "LabKey Production") is one way to pick this mode.
3. IntelliJ Run vs. Debug option. These buttons run the current build using the currently selected run configuration, and determine whether IntelliJ debugging is enabled or not.

Adam