It can, and does. There’s nothing extra you have to do to have it work like that. What you do have to do is ensure that the bike computer isn’t paired for controlling the KICKR (since SYSTM is doing that). This is called ANT+ FE-C or Bluetooth Smart Trainer Control. You just want to pair the power, speed, and cadence at which point the bike computer should just record the data. In Wahoo bike computer land this is called passive mode.
One suggestion to add: in The Wahoo Fitness App, find the KICKR Core (Settings>Sensors) and make sure Erg Mode Speed Simulation is turned on. That will cause the KICKR to broadcast sensible speed/distance numbers when in Erg mode based on power. Otherwise, the numbers will be based on flywheel speed which is meaningless in Erg mode (speed will depend on the gear you’re in which is uncorrellated to effort in Erg mode).