Earlier quoted context omitted.
It does produce a local Wi-Fi network but there's no evidence that it supports internet communication. That would be considered a hotspot, which not all carriers even support.
I've never understood how this can be limited in practice: surely as far as the carrier is concerned, all traffic from the mobile device is the same (unless there are identifiers on the traffic coming from hotspotted devices via the mobile device). Here in Australia we've never had any form of hotspot detection/segmentation - if you have a data plan, all data features work (across all carriers). I do recall lots of o…
On android, there is an OS-level feature that checks the cell tower to verify if you're allowed to create a hotspot. It runs whenever you try to enable the hotspot feature. On rooted systems, you can disable this check. There are also apps that let you run a hotspot without using the OS feature, bypassing the check.