Microsoft is worse: they'll let you create an account, then lock it the next day, after you've already used it for something, if you don't link your phone number.
Phone number is used because it costs money to get, is hard to get in bulk, and in many countries is always tied to your identity.
I wonder what the market for throwaway phone number verification is worth.
In the past you could use BlueStacks android emulator to register Gmail accounts without sms verification even with VPN IPs. This year I've created a few Gmails without sms verification, once on desktop chrome (with Firefox they would've required sms) and a couple of times using the Gmail app on an Android phone.
I pondered this recently, and it seems to top out at a couple bucks per shot.
The problem is that the phone number tends to need to be persistent for the sake of security. You can't typically sign up for something that requires a phone number and then expect to be able to keep the account safe without maintaining exclusive access to that number.
I'm sure if it were cost effective, one of the password managers would have some kind of SMS integration, like Apple's hide my email, but for phone numbers.
If you're adding your phone number to a throw away account you use on Target or Walmart, it's likely okay.
The IP comment was likely because if someone can get your phone number from the Walmart service (via subpoena), to track you down, they can also get your IP address too.