When my current smartphone dies, I won't be replacing it with another smartphone. It will be interesting to see how much of an impact that will have on my ability to function in society.
My guess is that it won't be much of an impact beyond a decrease in convenience. Right now, it would only lock me out of using a few parking lots, my apartment building's laundromat, and a smattering of vending machines. I can live with that -- especially because I already do, since I will not install any app for that sort of nonsense.
Yet every so often I still hear someone (to be fair, not nearly as often as I used to) suggest that poor people (and sometimes refugees) having phones shows that they're undeserving of assistance, since they can clearly afford a phone. As you say, it's becoming the cheapest and in some cases only way to interact with a lot of businesses and services that are necessary simply to operate in society.
You'd also likely be long dead before anybody investigated your disappearance in this hypothetical scenario.
Not everyone has a smartphone, but that's not what is required. Just a mobile phone that can receive an SMS - and phones have been doing that for 25 years or something.
There's nothing trustworthy about the people who issued me this current sim card. There's no reason to assume I would want to link it to any account, even if it was allowed. Even if I were inclined to trust this process and if it were possible, I'd have to be using this provider when I am in a 3rd country or in my "home" country.
It is just a nonsensical set of assumptions on PayPal's part.