I have a newer car and don't generally have my phone "secured in a cradle". Instead it's laying on a platform and plugged in via USB, and my car has Android Auto.

I wonder if they are allowing for this mode of usage, and if so, it is allowed to use the built in screen in the car.

Although hands-free usage is supported in the sense of choosing navigation destinations, there are still plenty of buttons on the car touchscreen that are usable and intended to be used on my 2021 model.

It would be interesting if they are outlawing that sort of thing.

If they are not outlawing it, then it doesn't seem very consistent.