OK, I think I have this figured out.
The dongle plugs into the USB port. It fools the head unit into thinking that a phone is plugged in. It connects to the phone over wifi (direct?) because a bluetooth connection alone is not fast enough to carry the video for the moving maps.
So all it does is replace the cable connection, audio still comes over bluetooth. No wifi is required in the car, it still connects by being plugged in, it simply replaces the USB wire with wifi to the phone.
That being said, it may be useful on older cars, but 2019 and up provides enough power to charge a Note 4, my current TCL charges quickly, so there is no need for it.
Another point: In the older cars the port is only 500 Ma. Is that even enough to run the wifi in the dongle?