Short answer: it's complicated. It's possible, and near definite if they started this policy without getting a forest close to natural, that letting areas burn

Short answer: it's complicated. It's possible, and near definite if they started this policy without getting a forest close to natural, that letting areas burn could burn from "wild" areas to inhabited areas. Normally, fires would be stopped by natural firebreaks, like rainstorms, rivers and canyons, or unnatural firebreaks, like fire roads. However, because fire policy has been to put all fires out immediately, all of the dead brush, fallen branches, etc, are left to litter the floor of the forest. This means that a fire, which would normally just scorch the base of the living trees and ignite some of the dead but standing trees, would have a very good chance to burn nice and hot due to all the kindling in the form of dead brush and growth. This would in turn end up igniting even trees that reproduce in the fire cycle, like pines and sequoias, leaving the forest absolutely barren for miles and miles. However, there are ways to get the land fairly close to natural so that fires can stay relatively small. One of which is through prescribed burns, where the forestry department will intentionally, and carefully, set an area on fire to clear up all the brush and dead growth to act as an imitation of the natural process. It would also mean doing things like carefully grooming the areas around inhabited places to give even less fuel for any kind of fire. Unfortunately, implementing such policy would be very difficult because it would involve needing a lot of firefighters in the near term to manage prescribed burns, and the powers that be are hesitant to give much money to the forest service as it is.