Stolen iPhone: Find My tracking & notifications post-erase

and in the Settings it has "Cancel Erase".

The phone has not yet been erased. When it is, you will no longer see an option to Cancel Erase in Find My and you will receive another separate notification in Find My that the phone has been erased.

Notifications will not "show up" on the stolen phone.

How is the phone being tracked with Find My app if not connected to internet or cell service?

The phone can report on its location even if the phone is powered off....as long as the battery has a charge.....using what is known as "crowd sourcing". Another iPhone or other Apple device in close proximity to the iPhone can pick up the very brief intermittent Bluetooth signal that the phone is sending out.....even when it has been powered off.....and forward that information to the Internet, so you can see the phone's location in Find My.

The phone will need a good Wi-Fi Internet connection or a strong cellular signal for the erase to occur. When this happens, you will be notified via Find My.

Even if the phone is not erased, the bad guys cannot access the data on the phone without your Passcode, Apple ID and Password....information that you would never want to divulge.

I logged into my iCloud and Find My and just removed that phone

The bad guys won't be able to get into your phone to get your data, but unfortunately, when you did this, you gave whoever had the phone at the time the ability to erase the phone and set it up again for themselves or sell it to another person.

Bottom line.....you would never want to Remove the phone from Find My because that removes Activation Lock on the phone.

I don’t know if this is gonna help at all, but I recently had my phone stolen on November 22 in about a week after it just stopped showing the location on find my. I had already went to said location only to find a clueless elderly lady a town over from where I lost my phone. No other location ever updated so when my new phone came in the mail I logged into my iCloud and Find My and just removed that phone to protect my personal information. So I don’t know if maybe somebody actually got into my account and turned it off or if that’s like a thing after so long it just stopped showing.

Happy to help. Good luck!

You likely already know this, but watch out for any scam messages from "Apple Support", etc. Apple does not get involved with lost or stolen phones, so any message like this is not from Apple.