'wake on sms' sounds like the most ridiculous excuse ever.
It's essentially correct. To wake the car when it's in sleep mode, they use a ping feature of the cellular network operator based on SMS notifications.
In Australia, telstra is used to provide this network feature. There has been a similar outage of this service in the past, a couple of years back
This is not required if the car is "awake" which is why the app was continuing to see the car when sentry mode was running - the MCU remains active, and regular cellular data can communicate with the car.