It's pushed as an accessibility feature and it's great for many users in noisy environments also. Google says it’ll work over cellular or Wi-Fi and via apps like Duo, Telegram, WhatsApp, and Messenger, as well as the normal phone app.
To get around the privacy implications of putting live captions on for calls, Google said it will alert people if the person they’re talking to has Live Caption on by saying, “Hi, the person you’re about to speak with has call captions turned on. They’ll see captions of what you say to help them listen along.”
Live Caption works on-device, so technically does not need a data connection. So far not many non-Google phones have adopted the feature that debuted with Android 10, with the Samsung Galaxy S20 the first to get it.