Funny how this popped up, just now. Old topic.
Background: I used WFC back when it was prehistoric, a new service, 2007. I've had several phones with it all with different levels of success. You see, in the early days, all WFC ability was built into the hardware; from the Nokia 6086 - have a friend that still uses his as his main phone! - to the E73, all in the hardware. Along the way, it was figured out how to do it in the firmware, witness Android around v2.4. I've never seen the firmware versions as reliable as the hardware, and that has nothing to do with hand offs. A hardware phone will hand off in both directions (mostly!) WFC to cellular and back, generally seamless. Firmware updates is how TM got WFC into the 521 and other the phones after the fact via updates.
Firmware WFC can't do this, at least to the best of my knowledge. No hand offs. And that's how you can tell what phone has what.
Fast forward: I've been using a Lumia 810 but I wanted WFC and LTE. So now I have two 925's and I have discovered what the OP did in April. I cannot send SMS while on WFC. It immediately gives me an error message. I have to turn off either WFC or wifi to send it. What is most strange is that SMS uses voice frequencies, it has nothing to do with data service. Witness my no data TM SIM, SMS no problem.
MMS does require data service, regardless of wifi or over the air.
So, I've not aborbed the following link yet, but it does appear that Lumia's/WP do have an ongoing issue with this:
Nokia Lumia 521 Wi-Fi Texting - Microsoft Community
If indeed, all this is the case that it appears to be, MS should be ashamed of themselves.