Well...Word knows what the font is *supposed* to be. If it didn't, it wouldn't be able to display the font even if it had it! I think that what happens is, Word preserves that the font in the file is one other than anything it has, but then it font substitutes with something it does have. So the end effect is that the file looks wrong on that computer, but if one just edits some text and e-mails it back, I think the process allows the file to come back and still be in the originally defined font on the original computer. Whereas if the font substitution were destructive, when you got the file back, your Word would think the file was in his/her font.
Does that make any sense?