Yes. Defensive replacements are based off of the defensive replacement hierarchy in the Manager's Office. When the managerial settings for allowing defensive replacements has been met, the Sim Manager will look at the defensive replacement hierarchy to see if there is a player available at the position of the person being replaced who is at least as good at fielding as the current player.
It will then take the first available player on the list who is at least as good a fielder as the person currently in the game and sub him in. For example, if #1 is available and at least as good a fielder, that player will be inserted into the game. If he isn't but #2 is, the second player will be inserted into the game. And so on, and so on.
If nobody is available and a better fielder on the defensive replacement hierarchy than the player already in the game, no replacement will be made as the best available fielder is already in the game.
You can also control whether individual players are allowed to be replaced by a defensive replacement by checking the Def Rep box in their Advanced Hitting Settings.