The same issue, iPhone 12 iOS 14.4, watchOS 7.3, BMW 328 2017 wireless CarPlay

Updated my iPhone 12 to iOs 14.5 beta+ Apple watch 7.4 beta, the problem is still present. Airplane mode on/off - doesn't work for me, as well as repairing the phone with the car Really disappointed

iOS 14.5 beta2 + watchOS 7.4 beta2 - issue resolved!