And if the panic button is going to call the police, how is that any different from the passenger using their phone to contact police? Seems like extra steps of middlemen and confusion when the passenger could just call once they feel the need.

Think of it as a backup for the phone in the case where, say, there’s an adult and a kid in the car, the kid has no phone of their own, and the adult loses consciousness with their phone locked. Or the car is being actively jostled by a group of people (say it drove into the middle of an embryonic riot), causing the passenger to drop their phone, whereupon it slides under the seat. Or the phone just runs out of charge or doesn’t survive getting dropped into the passenger’s triple-extra-large fast-food coffee. It won’t be needed 99% of the time, but the other 1% might save someone’s life, and (presuming the car already has a cell modem it in) the cost of adding the feature should be minimal.