So is the Electrum server acting as a watch tower for Phoenix? Documentation isn't clear on the technical specifics of how the wallet doesn't need to be always-on.

This is what has been mentioned:

"Phoenix has been designed for less technical users, who don't know or want to run an always-on Lightning node on a server or to manage channels, with sensible trade-offs for those users."

https://phoenix.acinq.co/faq#can-i-connect-to-any-node-can-i-connect-to-my-own-node

"You can configure Phoenix to use your own Electrum server to watch the Blockchain and monitor your channels."

https://phoenix.acinq.co/faq#is-phoenix-trustless

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