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?
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