Yes there is a single inclusion of wp_nav_menu() in header.php for 1.3, this has a callback or fallback_cb to wp_menu_pages() run from a function in functions.php; if wp_nav_menu() not initialised from the dashboard bp will use the wp_menu_pages instead
Occurred to me when I first played around with it to configure dropdowns for bp-default that it might well necessitate a re-think of add-all-nav… plugin.
Also – and I am still fuming over this – but it was brought to my attention that wp_nav_menus do indeed do nested children but you have to visually arrange them (bad!) so I thank the WP forums and other places where I tried to elicit help on that and other wp_nav_menu issues for the lack of responses.
Definitely going to have to rethink Bp-WP-Navbar for the next update. For now though, I’m concentrating on learning some more basics to get my BP theme framework finished. You can see the support site built with it here: http://buddylite.com/
That’s looking very polished, wish I had time to get on with themeing