how else is it supposed to work without storing things?

Ask the phone for you contacts list when you need to view contacts? Ask the phone for text data when you need to view texts? Why wouldn't it work like that?

When I make a phone call, does it record both parties' voices and store them on the car's hard drive, or does it just stream the voice data through the car to and from the phone? It's the latter. So it's reasonable that someone might expect the other functions to work that way.