I think where the confusion comes is from this: Yes, generally when the Kanji is alone it usually uses the kun’yomi reading and also when it has hiragana attached to it. But then it is next to other Kanji chances are that it uses the on’yomi reading. Although, there are exceptions to this and most of them tell you when there is an exception.
I’m not sure if I’m 100% right but this is what I got from going through Textfugu.