Functions are evaluated as needed. Typically this would from "inside to out" so in your example it would be the innermost 'instring' and 'concat' first, then we use the output from them for 'substr' and then the output of that for the outer concat.

But we also try to be smart. For example, a function like:

case when substr(x,1,1) = 'A' then lower(y) else upper(y) end

we would execute "substr" first, and if the result came to 'A', then we would execute "lower(y)" and we would *not* execute the "upper" function because it is not needed.