I would say it's referring to WiFi on the phone side, rather than the Mac/PC side. Though you can plug an Ethernet adaptor into an iPhone it's very rarely done and so most people would understand they want to sync with their phone over WiFi, as opposed to USB cable.

Apple seems to mostly use Bonjour (mDNS) for these whether using a local network (and indeed that is the case for this wifi sync feature), but they also have a few features/frameworks that can also be setup over an Apple specific "peer to peer wifi" connection which is bootstrapped with bluetooth and switches to peer to peer wifi for fast data transfer, similar but not the same protocol as WiFi direct (according to https://developer.apple.com/forums/thread/12885). This is what AirPlay2 does for example. That is one way WiFi could matter for such a feature versus Ethernet.

This wifi sync definitely works with Ethernet on the Mac side (personal experience)