Is CRA core functionality assessed for the whole product or for one embedded component?
Assess the product as a whole. Integrating a component that itself performs an important or critical function does not automatically give the finished product that component's classification.
The Commission FAQ gives concrete examples: an embedded browser in a news app does not make the news app a browser, and a secure element in a laptop does not make the laptop a secure-element product. The draft guidance applies the same logic to a smartphone integrating an operating system.
Article 7(1) says integration of an Annex III product does not by itself trigger the corresponding important-product conformity procedures.
Section 3.2 gives browser/news-app and secure-element/laptop examples.
Point 126 and Example 49 explain that the finished product's core functionality controls.