It does. The SPU only handles decoding and playback of ADPCM samples from its own memory and receives all CD audio from an I2S bus; the CD-ROM sector decoder chip handles XA-ADPCM decoding and resampling to 44.1 KHz internally, then sends the audio over I2S as if it were CD-DA. This is also why the SPU's ADPCM format is slightly different from XA-ADPCM (no interleaving and 5 filter coefficient presets rather than just the 4 used by XA-ADPCM and the older ADPCM format used on the SNES).