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It certainly does. Pure inertial guidance with smartphone sensors is garbage. I must say I'm a bit startled by how many people evidently think that GPS is an internet service...

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Cell phones use A-GPS which relies on cellular data service. It allows for faster position fixes using base station signals. Of course a cell phone with a view of the sky can still get a position fix entirely from satellites, it just takes a little longer.

I've used GPS navigation extensively on my phone with no internet service; I drove clear across Canada with my simcard pulled, it works fine.

If I had to guess, these conflations of cell service with GPS are a product of misleading UX created by Google. OSMAnd makes the nature of GPS clear, displaying a count of satellites it's managed to hear. Enough satellites to get a location good enough for car navigation almost always takes less than a minute.

There are some other aspects of locations that use downloaded data, like building heights, wifi base station locations, etc.

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