It first downloads all packages from net, then it proceed totally offline starting by verifying downloaded files, signatures, extracting new packages and finally rebuilding initramfs.
Because arch is replacing the kernel and inittamfs in-place there is a chance that it will not boot if interrupted.
This issue was long resolved on other distro.
One way to mitigate it is by having multiple kernels (like LTS or hardened) that you can always pick in grub if the main one fail.