The offline function is meant for emergency or large scale protest like in Hong Kong, not for normal messaging. But yes if you have for example a big chat group then anyone who is in that group will share the encrypted chats to other devices in the same chat group that are in wifi/bluetooth range or connected to the internet(also tor network).

The diagram explains it pretty well, but generally in case of a full internet blackout it works very well if you have a bunch of people close together (same building, group on the street, etc). You can also create a so called mesh of wifi networks(not connected to the internet just local network) that spans a very big area and it will work with that.

If you have internet access it works like a completely normal messenger.