Hi Mark, yes, you understood correctly. I think banding can certainly be introduced at both of those steps: i.e., the color transformation via the printer profile, as well as the color math inside the driver. I cannot really comment on the latter, knowing very little about how the internals of modern print drivers work -- though I would guess it is rather unlikely to be problematic.
It is usually quite easy to avoid the former problem. For example, if you take a raw file in LR and hit the Print button, LR will render the raw file to a 16-bit in-memory image (you can think of this as a 16-bit ProPhoto TIFF that is never written to disk as a file) and does the printer profile color math on it, using the 16-bit data in the ICC profile (assuming your printer profile is 16 bits -- many are). I have not seen a case where visible banding in the print was due to this part of the processing pipeline.