This will not be possible as a confined app. You will need a background service that listen to incoming sms and forward it. I'm not sure if such app can be allowed in the openstore, but here is a few things to know. First create your background service, it could be in standard python if you are familiar with. Ofono is the service that emit notifications when new incoming sms, it uses dbus. api can be found here: https://github.com/rilmodem/ofono/blob/master/doc/messagemanager-api.txt (old repository but sending and receiving sms still like that ) AI can help you with a minimal script. then when your service seems to work, you have to create all the plumbery to install/remove/run it, you can find an example with battery-saver app: https://gitlab.com/lduboeuf/battery-saver/

Since Waydroid is using Linage you can still limit what the apps and services in the Android OS, such as Google Services, can access. Ive also noticed that both F-droid and Play Store auto updates when Waydroid is running, however they can lock up when booting Waydroid freshly since they seem to complain about time not being correct. I might be forced to use waydroid since my country have apps I need that only exists on iOS or Android. So this Topic is very relevant for me as in needing setup waydroid and make it a dev device since Waydroid is not certified ( Waydroid: Google Play Certification )

Thank you @Keneda !!