I'd say you're mostly correct. Weak subgrade doesn't necessarily always lead to pothole formation and rutting would begin before potholes start to appear unless the subgrade is that catastrophically weak. High tensile stress at the bottom of the asphalt layer leads to bottom up cracking which develop into potholes as the crack gets worn away. Potholes can also be formed by high moisture, poor drainage, weak or brittle mix, and insufficient thickness relative to in-situ traffic loading.