When they encounter interesting situations while testing on real roads, they then take that situation over to the simulator and train their algorithms on 1000s

When they encounter interesting situations while testing on real roads, they then take that situation over to the simulator and train their algorithms on 1000s of subtle variations of the situation, which Waymo calls 'fuzzing'. Simulating effectively is non-trivial. In spite of testing on a comparable scale to Waymo, Uber made very little progress in 2 years because they couldn't get their simulator to work right.