That's right.
The controller (not the drone) can only connect to a network if you are within wifi range.
Connect when indoors and then log in.
Then go outside and fly.
That's a bit confused and not what was being asked about.
You are thinking of the direction data provided by the compass and from the gyro sensor in the IMU.
GPS only gives position data, not directional data.
The situation you are talking about...
Yes ... without functioning GPS, the drone will not be aware of its position, so won't be able to report its position to the controller so it could be displayed on the compass/radar display.