Power will be drawn entirely from the Power Adapter as long as the overall CPU demand is less than the available output from the Power Adapter.
As such, if the Power Adapter output is less than demand, power will be drawn from both power sources. In simple terms, assuming that the iPad battery is fully charged, if the Power Adapter is capable of 12W - and the running load is 12W - the iPad battery will not discharge.
If instead the Power Adapter is capable of 10W, but the running load is 12W, the battery will supply the remaining 2W and slowly discharge.
When using the OEM Power Adapter supplied with an iPad, the Power Adapter is generally sufficiently rated to provide sufficient power for the iPad with maximum screen brightness and max’ CPU load - and still be able to charge the iPad battery at a reduced rate. In such situations, thermal management will likely reduce the charging rate anyway - so the reduced charging rate due to potentially limited external supply is likely to be irrelevant.
Charging characteristics become more significant when the iPad is being powered via the USB port of a computer - as many computer USB ports may be limited to 0.5-1.A @5V (i.e., 2.5-5.0W) - and in such circumstances the power demand of the ipad will be shared between available power from the computer - and the iPad battery.