Why does my iPhone wifi turn off when the hotspot is on?

Because your hotspot needs to pull an Internet connection from your cell service.

If it was using a WiFi connection, then it means WiFi is available and the other device would simply use that connection instead of going through your phone's WiFi hotspot.

When you set the HotSpot function to ON, then you will be providing an internet connection for your other devices. This internet connection is provided through your cellular data network and not through your Wi-Fi network. This is the reason why your WiFi symbol goes away and replaced with your cellular data symbol on your iPhone.

Axel F.

What you're talking about is tethered mode, but it does not pull the signal from a WiFi connection.

And yes, you can receive a signal through your cellular connection on your phone and share it to your computer via a USB cable.

Here's how to do it.

How to set up a Personal Hotspot on your iPhone or iPad - Apple Support

There are WiFi to USB devices that you can use if you want to go that route. Here are some available through Best Buy. I have the Netgear one myself.

https://www.bestbuy.com/site/searchpage.jsp?st=wifi+usb+adapter&_dyncharset=UTF-8&_dynSessConf=&id=pcat17071&type=page&sc=Global&cp=1&nrp=&sp=&qp=&list=n&af=true&iht=y&usc=All+Categories&ks=960&keys=keys