I'm hoping it's like Apple Pay, where I choose and authorize with Face ID + button. It shouldn't be passively readable. Anyways, it will be awhile before it applies in California. CA DMV is not an early adopter of this.
According to the announcement, that's exactly how it works. It uses the same functions as Apple Pay, Transit Passes, and Rewards cards to authenticate/authorize and then uses the new digital ID standard to present.