Waze continues to run in the background and will continue to navigate if you put the phone to sleep, or switch to another application, as long as you keep moving. If you put the phone to sleep and don't move for 10 minutes, Waze will turn off.
If you go into the menu and click "Switch Off", it will end navigation. When you reopen Waze, it will usually try to resume navigation to the same destination.
In reality, you shouldn't be using the "Switch Off" function while navigating unless you have to make an extended stop in the middle of a route.
If you're seeing different behavior, give some more details about exactly what you're doing when it happens.
