The key point here is that
I HAVE NOT SUBSCRIBED TO MY CAR's ONSTAR DATA PLAN

1. my iPhone is able to connect to the car over WiFi for Apple Car Play
2. Waze is able to operate through "WiFi Car Play" on my car's infotainment system
3. This is key: THE CAR DOES NOT HAVE A DATA PLAN. So while I'm connected to the car's local area network (LAN) my phone does not have wide area network (WAN) data through the car's WiFi.
4. Since the phone is connected to the car over WiFi, Waze thinks it should have WAN data and doesn't try any other method like the phone's 5G connection. Since the WiFi is LAN-only, Waze does not have a voice for turn information and it does not have any crowd-sourced information.

It would be great if Waze could test for WAN data over WiFi and if it finds there is nothing there it switches to 5G for data. It can stay connected to WiFi for CarPlay, but get the data to operate separately. Maybe you could create an on/off switch for this in the settings so people can choose.

My only work around is to connect by wire and continue to turn off my phone's WiFi so that it doesn't try to connect to the WiFi CarPlay. If Waze could do Car Play over WiFi and separately data over 5G this would be much better.