How can it load when the internet is down?!? Doesn’t the PWA source have to be fetched? And if it’s cached, then so can be the static resources.

The complete web page and all resources are saved locally by the service worker. "Clear site data"/clear cookies will delete it. However, clearing the normal browser cache won't. It's overall a little more persistent than the cache for static resources. However, it needs to be installed as an app to really work offline without initial loading. Chrome will prompt you for that on Android, Linux, and Windows. Safari can also do that but makes you jump through hoops. In Firefox, the PWA will work like a page that loads even when the machine is offline.