I believe it is part of the server code itself and not workflow that is responsible for enumerating groups/group IDs to get their members. The filter notify action does this when the notification filter fires and gets the list of addresses to use when creating the mail message records.
There may be workflow that is part of the ITSM notification functionality but not if it is simply a filter.
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You mentioned Offline users. There is no real Offline functionality for a Remedy account. In ITSM the notification subsystem takes into account People records, their notification preference, etc. however as Mark Walters indicated this isn't at the AR Server level. We also see SLM notifications that go to Offline people (ITSM 9.1 SP2). Unfortunately SLM doesn't use the ITSM notification subsystem so what you are seeing is straight AR notifications to the Group ID in which there is no Offline functionality.
I suspect SLM doesn't use the notification subsystem because there was a time when SLM could be run as a stand alone product (typically to be used with a standalone CMDB I believe). Since SLM did not always have ITSM to utilize the notification subsystem it needed to be able to send notifications all by itself.