i also had the same question as the original poster.Yes. Phone can be in another state, off, dead. You can still make calls with the watch. I use this often while coaching a mountain bike team so other coaches or parents can reach me while we are in the woods. Or my office needs to reach me, The Watch is clear even while my hands are on the bars and tearing through the trees. Love this watch.
My understanding is:i also had the same question as the original poster.
thanks for your clarification.
so, to confirm:
even though yr iPhone is not connected to the net, and is turned off, and not within bluetooth range:
1 you can make calls using cellular (as in calling any phone number)
2 you can make calls using the internet (as in calling a FaceTime Audio number)
3 you can text iMessage
4 you can text SMS