Yup, wireless CarPlay uses phone Wi-Fi to transmit video stream from phone to carlinkit dongle.
Hmm wireless CarPlay not working after autokit updated, in autokit preferences …check to see if the connection method is manual or automatic. If it is set the manual, you’d need to press the Bluetooth icon on autokit to start wireless CarPlay. You can set it to automatic and this makes dongle try wireless first. You might have to go over initial steps of making wireless CarPlay setup. That being said, wired CarPlay is a bit faster & you charge your phone up too