Battery performance on iPad in sidecar mode
The iPad is always powered from the battery. It doesn't matter whether the charger is plugged in or not, the power is always drawn from the battery.
This is actually essential in ensuring that a sudden spike in power consumption (for example due to briefly engaging the CPU and GPU at 100%) doesn't result in system shutdown because the charger cannot supply enough power.
Ofcourse when the charger is plugged in, the battery is charged at the same time. If the power draw is less than the charger output, then the battery will be charged (until it reaches max) - otherwise you can still experience that the battery level drops while using the iPad.