Yes. If you delete EVERY file there, you get stuck with generic covers, as I just found out the hard way after getting frustrated trying to find the exact 3 files for each of the books currently on my Kobo (because it doesn't bother deleting the .parsed files for items not on the device...).
EDIT: Wonder if there's a way to get it to reprocess everything, short of removing and re-adding? (adding a new book to it, which gets to have its cover, doesn't trigger enough of a processing...)
EDIT 2: Powering off, removing my microSD card, powering on, powering off, reinserting my microSD card, then powering on again doesn't trigger a processing, either.