The internal 5V linear regulator is powered by V24. The REG pin is an output that is either connected to V5 or left unconnected. The MAX14827A must have 5V connected to V5 for normal operation so, if you wish to bypass the internal regulator (to reduce power dissipation, for example), you can leave REG unconnected (essentially disabling the regulator) and connect an external supply to V5. If you wish to use the V5 regulator, then you can connect REG to V5 (enabling the regulator) and use that to power any acceptable external load.
There is no internal connection between V5 and REG. The linear regulator must be enabled/disabled externally as noted above.