In the most material terms, they're probably more distracted than two people who are both present and chatting which isn't great for anybody's experience. People also tend to be shouting into the phone, worse if they're not using headphones so you get to hear the other person shouting back.
At a psychic level it also kind of sucks in ways that are harder to describe.
Yes. People focused on their phones are even more oblivious to their surroundings than two people having a conversation.
Not only that, the fact that the person on the other side of the conversation does not have any clues as to what is happening and as such is wont to keep on blathering while her conversation partner really needs to focus his attention on that slippery slope/crumbling ledge/onrushing traffic/deer jumping in front of the car/rushing river/person in distress/...(fill in the blanks)... makes telephone conversations much worse than those between two or more people in the same location.