Read the following. It might help understand the Apple Watch behavior when the iPhone is nearby and when it is not
https://support.apple.com/en-us/HT205547
Make sure you read all the footnotes as they have valuable bits of information.
In general, if the Apple Watch can see your iPhone via Low Energy Bluetooth, it will use that, and via that connection the Apple Watch will use the iPhone's radios (WiFi, cellular, GPS).
If Bluetooth does not work, then it will try WiFi (useful when you are on the same home WiFi network but too far away from the iPhone for Bluetooth). And again, the Apple Watch will try to use the iPhone Cellular radio. It will use its own WiFi at this point as there is no power savings anymore avoiding WiFi if it is the only way to talk to the iPhone, might as well just connect to the internet directly.
If you have WiFi access and cannot find the iPhone, the Apple Watch will be able to use the internet and of course your built in GPS
If no WiFi or not on the same network, then if (AND ONLY IF) you have a Cellular model, then the Apple Watch uses the cellular radio. If you have GPS only model (like I do), then just the GPS radio is available and whatever non-networked services are available on the Apple Watch, such as the date and time, stored music and podcasts, stored pictures, etc...
Again, please read the above link as it will fill in missing bits of information.