iPhones still let you use certain contactless features (like Suica) even when the battery has "run out" (ie., the main OS has shut off). The reserve battery power is enough to run Suica, CarKey support, and FindMy.
I imagine there are only maybe three people as stupid as me to try this, but just in case: it works fine when the battery runs out; but it does _not_ work during the OS update process.
Interestingly, but not exactly related - the OS update process will not start if you're connected to CarPlay. Probably to avoid automatic updates from triggering when you plug it in to charge in the car.
I don't know about the iPhone but the Apple Watch definitely doesn't work when the battery is dead.