My car has wired carplay/android auto, but I have a nifty little USB dongle that receives carplay/android auto wirelessly and passes it to the car via USB. Sometimes called an AI box, I think.

These things contain a whole System-on-a-Chip board. I presume what it's acting like a middle box; pretending to be the headunit to the phone, and then sending the phone's output to the headunit, pretending to be a phone.

Since they need a quite beefy CPU to do that, I'm guessing they don't just pass along packets, but actually speak the protocol on both ends, and perhaps transcode the a/v stream.