Will this DD command work?

Yes it will work, mounted storage will not an issue but files which had changed during backup will be corrupted, for test i used boot partition of the test virtual machine with Centos 7

simple script that will make changes to file in second session is:

while :; 
do
  let i++
  echo "test$i" >> /boot/testfile
  sleep 0.5s
done

you can run changing script and then run your command

root@testkvm ~ $  dd status=progress if=/dev/sda1 bs=10M conv=sync,noerror | gzip -9 - | dd of=/tmp/testfile.gz
545259520 bytes (545 MB) copied, 27.401949 s, 19.9 MB/s
51+1 records in
52+0 records out
545259520 bytes (545 MB) copied, 27.4028 s, 19.9 MB/s
206820+1 records in
206820+1 records out
105892004 bytes (106 MB) copied, 27.4112 s, 3.9 MB/s

root@testkvm /tmp $  gunzip /tmp/testfile.gz

root@testkvm /tmp $  mount /tmp/testfile /mnt

root@testkvm /tmp $  cat /mnt/testfile
▒+▒.▒▒▒▒dI▒(i▒-▒)mCa▒▒J!▒إ'[▒▒▒f▒▒;▒)i▒ٳ:g▒▒▒澿▒▒▒▒O▒▒z▒=o▒)�]▒}koy{▒g▒▒s>l▒▒▒▒?U▒lޛ▒▒kλl▒'ۯ▒▒,▒▒▒5▒▒▒o[{▒sw▒▒j▒▒▒)▒▒▒▒▒▒▒▒M|u▒▒▒>׳;▒▒Ҏ▒=▒+?▒▒?N▒▒▒[+▒ol▒▒o▒▒▒ܜ▒?T\▒w▒▒▒▒[▒R▒X▒▒▒n▒▒[▒^▒^▒\▒▒Go▒▒▒▒▒▒ꀻ{ٲ﮺▒▒C7▒\▒▒▒▒O2៮▒w▒mNE▒4▒▒w▒▒▒▒V▒▒
                                                                                                                                                                                                                                         ▒EV>▒▒8▒▒▒▒w▒
▒V▒▒▒▒▒k:▒NO▒▒▒▒V▒pp▒Y▒mg▒μ0▒▒▒▒▒▒L▒▒▒▒▒▒▒▒p▒'▒.▒tÁ▒e▒▒{>▒▒▒▒▒▒▒▒c▒▒{▒{6>:'▒▒▒▒▒{▒▒▒/▒▒>▒▒S▒▒[_▒▒▒▒Zǯ▒W՟:ޝtƿ▒84}▒+▒▒▒▒y▒u▒;▒㍉▒

as you see there is incorrect data

source file at the moment of backup finished looks like:

root@testkvm  ~ $  cat /boot/testfile
test1
test2
test3
...
test72

so you can backup with this command only if you're sure there will no any changes during backup