To my understanding and in my experience, that is not correct, ie., it does not include the wheel arches.. The underbody refers to the under floor-pan of the car; the wheel arches surrounding the wheels should be looked at for all aspects of judging relative to D’Etat, ie., general condition and cleanliness.
Because it is D’Etat, there may be some aspects of the car’s body which may not be authentic, potentially including the wheel arches. If that was the case, then they would not be marked down, only potentially for cleanliness and general condition.
That is the main difference between D’Etat and D’Elegance; if the car was being judged in D’Elegance and the wheel arches were not correctly authentic, then they would be judged and marked down for incorrect authenticity, as well as, potentially, for general condition and cleanliness.
It is generally for that authenticity reason that people are wary of competing in Concour D’Elegance.. For me it is the reason that cars should be entered in D’Elegance; to help the owners improve their car progressively and find out where they have let themselves and their car down.