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Waze uses, at the very least, data from people who use Waze. But I suppose Waze also uses the location data Google gets from Android phones. And vice-versa.

I don't know what happens under their hood, but I know for sure they source some data from third parties. Makes sense to, considering TfL provides a lot of data - e.g. live bus times etc

I expect what they mean is Waze uses real-time traffic data for routing. Google Maps displays traffic conditions but I don't remember that impacting the routing it gives you. Last time I used it, it just marked road sections as high-traffic but didn't truly re-route around on the fly.

Google maps re-routes around traffic on the fly and has done so for many years. It shows you the option and then you have to tap to confirm.

In my experience it's tap to decline the rerouting, not tap to confirm.