When Android phones have the ‘hey google’ wake word setting enabled so it’s always listening for it, are these audio snippets held in RAM when looking for the wake word and not stored on the phone or storage anywhere? Since overwriting everything it hears on the phone's storage would wear it out?
The restriction for 'always on' listening isn't wearing out the RAM/storage, its power management.
Based on: Qualcomm Voice Assistant promotional material, Qualcomm has its own low-power processor for handling the 'wake word' which depending on the activity, bring up the regular CPUs for the OS/apps to manage what happens next.
I suspect that the low-power processor is using its own RAM to handle the wake-word/dealing with ambient audio until detection at which point other parts of the OS stack need to handle things the user is specifying like "do xyz with abc".
Further details can be found in the Android Open Source Project - Sound Trigger.