How does lost ship replacement work with mid level subordinates set with a specific non-changing order work?

[Raptor34]

So auto replacement apparently only triggers when the commander has a change in order. I.e. if the flagship is given an order to say fly and wait, and potentially other cases though I'm uncertain, then it would never replenish it's subordinates.
But how does these things flow through the command structure?

I'll give an example. My idea is to have the overall commander be a station, then a Sapporo on PD would be ordered to hold position somewhere near a gate and then have intercept/bombard groups assigned to it. If the Sapporo was instead the fleet commander then this wouldn't work, but since the Sapporo is only an intermediate commander, would it's subordinates losses be auto replaced? I.e. is the ship replacement check done by the fleet commander for the whole fleet? Or are checks only done for immediate subordinates and therefore ship replacement checks are only done when the immediate commander has an order change?