So I did hear back from CarlinKit. Here’s what they said:
Hello, wireless Carplay, need to use the phone's WiFi to transfer data, the consumption is the phone's traffic, so the phone's WiFi, can only connect to Carplay / CarlinKit 4.0.
The car's WiFi is not interfered.
I’m not exactly sure what it means but this morning I conducted an experiment. I took my iPad down to my car. I stared the car and it automatically connected my phone to CarPlay. I navigated the Command screen to “Connect Device to Hotspot” and used the Connect via QR code to connect my ipad to the car WiFi. It worked! My phone still showed the cell strength indicator but the iPad showed the WiFi signal strength indicator, meaning it was connected to the WiFi.
I’m still not exactly sure if the phone’s data traffic, including calls and texts, are being transmitted to the phone via cell data and then transmitted to the dongle via WiFi. This would mean that calls and texts are limited to cell strength. At least I know that the dongle does not take exclusive control of the WiFi. For now I know that the dongle connects y phone to CarPlay seamlessly and I can connect other devices to the car’s WiFi. Pretty happy with that.
I’m going to continue to research the ‘phone uses cell service’ thing.