Yes, the PASS FAQ page says to submit before they are in. If you download your app for one of the schools in the "check status" section you can see what it looks like.
It essentially says if a letter was received/requested/accepted/denied. They can see a date of when you requested it and what you marked as the deadline for it. My understanding is that it is very clear to the schools if you are still waiting on one. But PASS also says that they don't send reminders or anything to your writers so you have to keep following up with them.
However, from the open house that PASS had, they made it sound like the programs will not really look at your application until it is "complete"; it wont be complete until at least three of your letters are in (doesn't matter which, just three of the five). Once you get three, it reads as complete, and then schools will look at it and they can see if you are still waiting on other letters at that point.