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Yes, a loose neutral wire can effect the operation of Earth Leakage Circuit Breaker.
Earth wire is meant to protect the user in case there is earth fault in the device or circuit. Only earth wire alone is not sufficient. It needs to be provided with suitable circuit breaker that breaks the circuit automatically.
It checks resistance from a circuit or an electrical component to earth, to make sure it is electrically isolated. This must be a very high value of resistance, hence 'megohms'.
we can make an open circuit by disconnecting the wire or break the circuit and a closed circuit is made by connecting all wires with the contents of the circuits.
To design a circuit so that lights can be turned on and off separately, we connect the circuit in parallel.