“Instead of sharing your entire Contacts list in third-party apps, you can now type individual names to automatically fill their corresponding phone numbers, addresses, or email addresses in fields that request it. The autofill happens on your device, and contacts are not shared with third-party developers without your consent.“

This is pretty clear to me, you type a name, it’s looked up in your contacts by the OS, data is retrieved if there is a match and placed in the form. This is not the same as sharing an individual contact and allowing the app to continue to read it later, but still gives you a means to give contact data to an app without giving it access to the entire list.