[Help-bash] does bash stop children processes when reading from them??

[R .]

alright, say we have this:

while read line; do echo "$line"; done < <(func_or_process)

when doing piping and redirection, does bash run "func_or_process" all in one 
go, then dump all the output to an intermediate file then makes use of them for 
the rest of the commands??

or does bash halt the process like sending a SIGTSTP right after 
func_or_process flushes it's output buffer?? then uses that value for the 
iteration and then SIGCONT it at the very beginning of another iteration?

does it matter if it's a function or a process?? i'm asking as i want to know 
if it's still worth using command substitution at all.