What are the consequences of this? What prevents Google from making and selling a six-inch ("phone-sized") tablet, and moving SMS to Hangouts and calls to Duo?
Probably the fact that nobody would buy it.
Is this device going to rely on public Wifi to get messages when out and about? Otherwise, if it needs a data connection, you'll have to get mobile networks involved, and I doubt they'd co-operate with an end run around themselves.
Tablets with a data connection are still required to support sms