Photo matching is activated automatically if an employee has presented with his or her Form I-9 a:
I-551, (Permanent Resident Card)
Form I-766, (Employment Authorization Document), or
U.S. passport or passport card
If no photo is available, the case will either automatically skip photo matching or No Photo on this Document may display in place of a photo.
The three cases mentioned above require a photo to already be on file with the federal goverment. Thus, the photo with the I-9 can be matched against the photo already on file with the feds.
So, yes, not every application can or will be photo matched, but it is a beginning. Green card holders, people with work visas, etc. can be checked as well as amcits with passports. If the applicant has phony or counterfeit documents, it will be discovered in those cases.