Google's android does, and there are specific services in the OS for that, such as vz* sprint* tm* and carrier config/services. There are also a bunch of Qualcomm services running that to various things.

So my question was - I don't have any of that stuff on my phone, with a custom rooted rom, and those services disabled/removed. Simple test now - if I set my phone to 2G, it connects to 2G with full bars, and says 2G. If I set it to LTE, it says LTE and displays 1 bar. Also, every time I reboot the phone, it pop us "carrier config failed."

This makes me believe this likely applies to phones bought from a carrier and not re-flashed. The fact is, if you for some reason buy a phone from a carrier, you are buying into their ecosystem, and for people like that - most people, this 5G icon is what they want, because to them it means faster than the 4G icon on that phone, so I don't see an issue here.