They were real satellites but deployed on the suborbital trajectory of this flight, so will have burned up over the Indian ocean about the time that the ship re-entered.

The goal was to get about 20 minutes of testing the new satellites in space, not for them to have any chance of becoming operational.

Starship hasn't been entering a full orbit so far because it would be really bad if the relight burn did fail - chunks of ship would rain down a few days/weeks later on some random area anywhere within 27° of the equator. On a much smaller scale this has been an internationally embarrassing problem for China's LM-5.