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It's more complex than that. Google upweights it because text in the URL is assumed to be significant to the user. So it's a bit of both, really.

It would be a shame if URL text loses its SEO value because it's getting hidden. Slugs in the url are human-friendly and should be encouraged.

The URL structure is usually mirrored on the actual website by way of clickable breadcrumbs or as navigational information architecture.

People understand slashes indicate folders and directories, even though database-driven CMSes do not use folder structures. They can figure out that they can go one level from from "example.com/cars/toyota" by removing the "/toyota"

I don’t agree with the breadcrumb mirroring. It’s orthogonal. You can have breadcrumb or not and it wouldn’t matter to the user if it mirrors the url or not.

> That extra human readable section is not added for humans. It’s added for SEO. That is, for Google.

It is indeed for humans. After all, the whole purpose of SEO is to show up on the 1st or 2nd SRP for web searches conducted by humans.

Not for humans browsing the site currently (which is the distinction that matters)