Yes, this is true. The proof is below.
Beware nevertheless that you cannot have an inequality of the form
$$
| f \varphi |_{\dot{W}^{1,\infty}(\Omega)} \leq \| \varphi \|_{C^1} \cdot |f|_{\dot{W}^{1,\infty}(\Omega)} \quad \text{i.e.} \quad
\| D^\alpha ( f \varphi ) \|_{L^\infty(\Omega)} \leq \| \varphi \|_{C^1} \| D^\alpha f \|_{L^\infty(\Omega)}
$$
because you might have $f(x) = C$ a constant, for which the right-hand sides are $0$, but the left-hand sides might be arbitrarily large.
Now the proof. First, $f \varphi \in L^1_{loc}(\Omega)$ because $f \in L^1_{loc}(\Omega)$ and $\varphi \in L^\infty(\Omega)$.
Moreover, from the Leibniz formula:
$$
D^\alpha(f\varphi) = (D^\alpha f) \varphi + f (D^\alpha \varphi).
$$
The first term is easy: $D^\alpha f \in L^\infty(\Omega)$ was the assumption, and $\varphi \in L^\infty(\Omega)$ also, so their product too. For the second term, since $D^\alpha \varphi \in L^\infty(\Omega)$ and is compactly supported, we only need to check that $f \in L^\infty_{loc}(\Omega)$.
Let $K \subset \Omega$ be a compact set. Up to a finite covering, we can assume that $K$ is a closed ball of radius $r > 0$. We want to prove that $f \in L^\infty(K)$. Taking any pair of points $a,b$ in the ball, we have
$$
|f(b)-f(a)| \leq 2r \|D f\|_{L^\infty(K)}
$$
hence
$$
|f(b)| \leq |f(a)| + 2r \|D f\|_{L^\infty(K)}.
$$
Averaging over $a \in K$, we obtain
$$
|f(b)| \leq C \| f \|_{L^1(K)} + C\|D f\|_{L^\infty(K)}.
$$
Since $f \in \dot{W}^{1,\infty}(\Omega)$, the right-hand side is finite, so $f \in L^\infty(K)$. Hence $f \in L^\infty_{loc}(\Omega)$, which concludes the proof.
(2) The second is why we can have "|f(b)-f(a)|≤2r||Df|L∞(K)"? It seems if we don't assume K is a closed ball, we can replace 2r by diam(K) (i.e. the diamter of K). I know this inequality is true if f∈C1(Ω) and without assume K is a closed ball. – Trump May 12 '23 at 06:26