It’s just a hotspot. It’s probably no more or less secure than any other hotspot.

I have a recent Corolla with this feature and really like it. It may not be useful for you if your cell phone has unlimited data. But I’m on a pay as you go plan run through T-Mobile so it’s cheaper to pay for the car wifi than data. For $10 a month, I don’t have to worry about running up a big bill with streaming and GPS.

The wifi also runs through Verizon so it’s nice to have two different ways to call for help if you’re stranded between T-Mobile towers.

I expect these issues are mostly my own and it isn’t that useful for most. Honestly, I would bet that AT&T or Verizon is paying Toyota to put these into cars so they can sell data plans.

On point 2, the individual mandate was repealed in 2018. There’s no federal penalty for not having insurance.