You are required to use the coexistence mode TeamsOnly if you want to use Phone System with Teams. If you are in Island mode calls will be handled by Skype for Business Online instead. I guess that is the simple explanation since Teams and Skype for Business is using the same components server-side for enabling Phone System you have to tell the server that now route calls to Teams and that is done with TeamsOnly coexistence mode.
It depends on the devices used, if they still utilize skype, it technically still uses Skype for phone connectivity on the back end when in Teams Only mode unless this has changed in the past year, haven't messed with phone hardware recently ;).
The only one that usually is an issue IMO is front desk / console users where I would set them up with a frontdesk user account as Skype only for their front desk login and have their own personal account using Teams and just login to that front desk Skype client with that account.