I can believe that.
Kenwood TNC is a reasonably standalone module (this is why I am using itseparately) but it frequently communicates with the rest of the system via internal dedicated serial port. Its absence will be immediately known to the main unit brains due to lack of command responses.
I don't know if there is a soft recovery from TNC failure in the 700 - it might just keep trying to boot until it detects one.
I have 710G and in there TNC is embedded into the display unit (even though it is, essentially, the same TNC hardware and firmware.)
Please post updates of your findings - this is interesting!