VPN is both, an interface on your device and a network connection (to a provider). Netguard only uses the first. So every request is going through Netguard but is not sent to a VPN provider, it leaves your device like it would if Netguard wasn't active.
So no VPN provider can see your traffic.
While being sent through your local Netguard, the request is checked whether it should be blocked or not. This is done by its name. If the name is on a block list (real list or manually blocked) Netguard ensures that the request will end in nowhere otherwise it will go through.