This question is a great example of why not to take foreign (ie Greek) explanations of Egyptian traditions on face value.

Canopus is not an Egyptian god, and no jar named Canopus was ever worshipped in Egypt. According to Greek myths, Canopus died in Egypt and Menelaus built a monument for him there.

The Egyptians truly could not have cared less about the Iliad, Canopus or Menelaus. It's a story that very few Egyptians would have known about until the Hellenistic period, when many Greeks moved to the country.

Osiris, the ancient Egyptian god of the dead, was sometimes depicted as a jar with a head. This was the preferred form of Osiris worshipped at Peguat, near Abubakir, Egypt. Greeks at some point decided that the Osiris of Peguat must really be Canopus, and that Peguat was where Canopus was buried. In the Ptolemaic period, when Egypt was briefly ruled by a Greek dynasty, the town was called Canopus.

It's all retroactive invention. In that sense, it doesn't have to be any more literally true than the idea that gods and their offspring had founded the cities of Greece.

It was not uncommon for the ancient Greeks to claim that Egyptian gods, myths and traditions were in some way connected to Greece. Part of the reason for this was the fact Egyptian civilization predated Classical Greece by so many millennia, so creating ties to Egypt added age and legitimacy to myths. Another motivation might have been the simple desire to seek commonality and shared heritage.

This is the same reason that some myths claimed that Helen of Troy spent a year living in Egypt. It's a great setting for a story.

There's a much later, and equally baffling, bit of confusion about "Canopus". It was traditional for a mummy's organs to be removed and preserved in a jar. Each jar represented a specific deity, who was charged with protecting the organs. Originally, these jars were plain but in later periods they were topped with the heads of a baboon, falcon, human, and jackal, respectively.

Early archaeologists saw the animal headed jars used to store organs, they assumed that it must be connected to "Canopus" (the animal-headed jar of Osiris). We now know that the jars represent neither Osiris nor "Canopus". We still call them canopic jars because of this misunderstanding.

So that's it. It's an "Egyptian" god that never really existed, based on a story the Greeks told themselves. Ancient Egyptian mythology doesn't really even factor into it.