Yes, MRP will generate buy orders for all Demand (Both top and sub level assemblies).  MRP demand comes from three places:  SO’s, WO’s and Forecast. MRP assumes that you will generate work orders when needed, and generates the buy orders so that the material is ready when it is time to generate the work order. 

Some users prefer not using the Work Order creation in the Sales Order module and believe that it is inefficient to have the work orders created before they are needed. The MRP will say when they are needed, and the user is better off waiting until that time to due so, since it alleviates extra handling should the conditions of the assembly change in the meantime.