Model: iPhone 11
I have a very similar issue on my device as well. The only difference that my issue has is that my phone will continue to show full bars of 4G connection even though there is no internet at all. Calls and SMSes can pass through though.
My timeline of facing this issue:iOS 13.6 - Faced this issue one time on iOS 13.6 when I first got the phone in July. Restarted the phone and the issue disappeared.
iOS 14 Public Beta 6 - Joined the public beta for iOS 14 and this issue came back. Happens frequently when I am outside of my connected Wifi range.
iOS 13.7 - Rolled back to iOS 13.7 thinking that it might an iOS 14 bug. Same with iOS 13.6, happened one time and restarting the phone fixed the issue.
iOS 14 Stable Release - Updated to iOS 14 thinking that this issue is fixed. Turns out it was not fixed at all, still the same scenario with iOS 14 Public Beta 6.
iOS 14.0.1 - Still the same issue, no fixes at all.
iOS 14.1 - Still the same issue, no fixes at all. At this point I thought my phone has a hardware fault so I contacted Apple Support and they made a warranty claim because they can't fix it as well.
iOS 14.2 - Got my phone back after two weeks waiting for the Service Provider to return my phone. Updated to iOS 14.2 and the issue persists.
Things that I have done to fix this issue that doesn't do anything: Reset Network Settings
Factory Reset
Restore the phone through iTunes
Replaced SIM card
Disabled VPN
The temporary fixes so far: Removing the SIM card and put it back again
Restarting the phone
Do a soft reset
I have contacted Apple Support about this issue again and again and have been transferred between senior advisors with different opinions.
The resolution that they have came up with for now is that I will have to log all the times when my phone loses cellular data, and sent to them once I have 24 hours' worth of logs. I have been logging the issues for two weeks now and hopefully this will help them on fixing this issue.
I believe the modem updates released back in iOS 14.1 and iOS 14.2 were meant to fix this issue but they have failed, apparently.
Note: This issue seems to be happening only on 4G.