No, it doesn't do demod, it's probably a badly written bit of datasheet. The two-chip TEA set are basically (well, later revisions of the same type of chip) what is within the metal cased tuner block in the tuner module.

The DSP only has FM-MPX, AM-AF and signal level inputs. It can't tune broadband signals - it only has ADC capabilities sufficient to get to the 38kHz (pilot is 19kHz, RDS is 38kHz ISTR, L+R is 0-19 and L-R is 19-38) FM encoded signal.

Hugo