No Stupid Questions
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There's a few things here.
The government doesn't actually know who's illegal or legal unless they specifically check a physical person. It's not like they maintain a list of "illegal" people. Your name gets recorded when you enter the country legally, but it's not recorded when you leave. If you fail to leave, they don't really know until they find you and match you to the entry. If you entered illegally, there's no record at all.
Second, You could easily use a fake ID or fake identity to get a cellphone and the carriers wouldn't give a shit as long as the bill gets paid. It doesn't even have to be under your name, maybe it's under your friend's account.
Third, I'm not sure how prevalent this is, but you don't need a "cell" phone to have a phone. A lot of poor people just have a device that can connect to WIFI, and make calls through an app or just message.
Some carriers specifically cater to unbanked people.
When I worked at Radio Shack back in the day, Sprint had a card you could just hand to the cashier with cash. Didn’t even need to speak any English. The card had all your details on it.
Of course they charged a $5 fee per transaction because fuck poor people.