Having read the announcement about google nearby 2.0 it's clear that WiFi connections are supported.
Nearby Connections uses WiFi, Bluetooth LE & Classic Bluetooth under the hood to discover and establish connections to nearby devices.
Or from the docs overview page
Under the hood, the API uses a combination of Bluetooth, BLE, and Wifi hotspots
What I'm not clear on is whether the WiFi support is exclusively when devices are connected to the same WiFi router, or whether the service will also use WiFi P2P (aka WiFi Direct) to establish connections when possible.
My experience using similar services on other platforms is that bluetooth connections can often be too slow for fast paced multiplayer games. My title already supports connections over WiFi routers, so ideally I'd want the service to add WiFi play in the absence of a router.