The reviewer will send the app back with the first issue they come across. Time is of the essence, and there's no point in going any further with reviewing the app as a) the developer might not bother resubmittingor be able to fix the first issue, b) the fix for the first issue might clear up other issues or introduce more, c) the first issue might prevent the reviewer from getting any further. There will be other reasons, and it's just not worth a reviewer continuing with an app that could be riddled with bugs.
Depending on the nature of the issue and how long it takes to fix the app might go to the back of the queue to be picked up by a different reviewer, or it may go back to the original reviewer to be picked back up as soon as they're available.
Quite a few issues these days are picked up during the upload process when the app's code is scanned by Apple's servers, and if any are found then the upload fails. If an app is returned multiple times from the review process then it has to make you question the quality of the app.
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