If you are wanting the system to automatically replace the Assembly Item with the Substitution because the Assembly Item's BOM does not have enough inventory, it does not do this out-of-the-box. It would require an extension (customization) to check the BOM availability, then run the Select Item Substitution process if needed.
If you are wanting the system to automatically replace an Item on the Assembly Order BOM, it does not do this either. This would also require an extension to check the BOM availability (which it does do) and replace any Items that are short with any of the available substitutions. I can see some pitfalls in this approach. There may be multiple Items that are short, and replacing some Items may not allow the Assembly to complete. In this case it may be better to wait for the main Items to become available before completing the Assembly. You would want to think through the various scenarios before writing the logic on when to substitute the BOM Items.
Hope this is helpful and gives you some thoughts on ways to make BC work best for you!
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