Yes, you would have to composite the AO with the Beauty in post (usually with a mode of multiply in Photoshop, Premiere, After Effects, Fusion, etc), you can't embed it into the beauty in any way. Does make for extra flexibility in terms of controlling the strength of the AO without having to re-render, by controlling how strong the mix is, or even adjusting things like contrast or exposure on the AO layer.
When applied to a material, it's usually used as a mask to blend between materials, so you can do things like add weathering / moss / wear-and-tear etc into nooks and crannies or where objects meet. Not sure I would recommend it for adding the fake shadows in a material as every material in the scene would need it. You could blend the default diffuse colour or texture with the AO, but then this final colour would be lit by the lighting in the scene, so that wouldn't necessarily give expected results - for the usual way of using AO as a fake shadow, combining AO and Beauty in post would be the way to go.
One thing to keep in mind, AO was originally all about adding fake shadows that simulated realistic lighting back when realistic lighting wasn't possible - Corona will give you that realism without AO, though it can remain useful as a way of "highlighting" or "picking out" geometry on an object by creating darker areas on edges or in corners. Since it is definitely an effect rather than realistic, it can only be created as a separate pass, and not embedded into the beauty (but I have found that to be an advantage with the extra control it gives, especially when doing animation which is time-consuming to re-render!)
