I think it is still called PowerShell, but to differentiate the installation source, Microsoft seem to be referring to the cross-platform version you can download from GitHub or via WinGet as PowerShell Core and the version that ships with Windows as Windows PowerShell

It has been ages since I installed Windows 11. Does it require (as in, you can’t continue without) an internet connection be enabled at an earlier stage in the installation process?

If not, then MS can patch all they want, if you have the installer on a USB drive already, they can’t force you to update it and the installer won’t fetch a patched OOBE installer with the internet disabled.