Exactly. Old-fashioned DLC ownership data is stored in the Steam cache or whatever, locally on your machine, so even if you’re offline, access to that data is available.

Battle Pass and Bazaar item ownership is determined by your Funcom Live Services account, and if the game can’t access FLS, it won’t let you use those items.

The Steam store does list “internet connection” as part of the game’s system requirements, and has done so for a few years now, but technically you can still play Single-Player offline on Steam, even though you can’t access all optional content.