There is an additional and separate cellular data plan (including SIM) that is supported by the GPS+Cellular models. You'll be using that and not your phone's.
On the other hand, there is a whole bunch of stuff that you can with the GPS only model, even when your phone is not within reach and not connected to your watch. For instance Apple Pay works, you can do any of the outdoors workouts, like running, etc. It is a surprisingly capable watch on it's own too.
What’s the difference between GPS and GPS + Cellular?
GPS
Apple Watch Series 3 (GPS) lets you send and receive text messages, answer phone calls, and receive notifications when it’s connected to your iPhone via Bluetooth and Wi-Fi. The built-in GPS works independently of your iPhone for distance, pace, and route mapping in workouts.
GPS + Cellular
Apple Watch Series 3 (GPS + Cellular) has all the same features, as well as built-in cellular. It gives you the freedom to send and receive text messages, answer phone calls, receive notifications, and stream Apple Music and Apple Podcasts — even when you don’t have your iPhone with you.