[Hot Tabasco]

I recently rented a 2024 Toyota Corolla and in the front instrument panel there was a small, square icon that would display the current speed limit on whatever street I was on then turn red if I exceeded that limit.

Where would the speed limit be transmitted from?

[SPDSHDW]

It’s probably scanning for signs, if it has Adaptive cruise control.
Modern cars have all sorts of sensors, cameras, and other nonsense. Most of this required by law. Joepedo’s NTHSA is forcing cars to detect speed limits and cut your speed if you’re 10 over posted speed limit. This is to go into effect by 2028. This is probably a lighter version of that.

There is also the possibility it’s getting the local speed limit via LTE telematics, based on GPS data, but I cannot say for sure.

[Ol' Dan Tucker]

Where would the speed limit be transmitted from?

There's an on-board speed limit sign reader.

[TalBlack]

My 2023 Tucson seems to see the speed limit sign. It doesn’t post the limit in n my dash until I pass an actual sign.

[rxh4n1]

“Where would the speed limit be transmitted from?”

The navigation service database. Garmin has the same feature.