It has crossovers that are nearly identical to the ICBM - one for the mains, one for the center, one for the side surrounds, and one for the rear surrounds. These crossovers are also applied to the 7.1 direct input (unless all speakers are set to large, in which case all bass management is bypassed anyway).
If you bypass the internal DAC for two-channel material (which can be done for any analog stereo input with the "bypass" setting), you will send full-range data to the mains as part of the bypass. If I remember correctly, however, the 990 behaves similarly to the 950 in analog stereo bypass and makes a digital copy that is then sent through the bass management to generate a signal for the sub. You don't remove anything from the signal to the mains, but you do get low frequency to your sub. In theory, this creates a double bass situation, but if you have your crossover point set to coincide with the point where you mains are rolling off anyway then the mains just roll off naturally and the sub is intended to slide in and pick up that information. (There's also a trim setting for each input that allows for reducing the level of the sub when in stereo mode, which can help blend the sub in with the mains in this case.)