I do the exact same thing - keep an old iPhone 2G there all the time. No issues with battery during the 2 years.
The power is supplied for about 15 minutes, same timeout for when music/radio shuts off if you are listening to with engine off.

Even with key out of ignition, power is supplied for same amount of time radio is able to play. Slightly less than 15 minutes.

Once, while camping and strong winds were rocking our tent, my wife and 2 kids moved in to sleep in the X5 (yes, we fit in there!). Obviously, we were not locked in the vehicle. A couple times a night vehicle would wake up and the iPhone would make the ding sound and light up. Then goes back to power disconnect in a minute. So, the vehicle does wake up when not locked.
If locked, the vehicle should go into sleep mode and technically should not wake up.

P.S. your avatar picture is upside down