This particular building is an old AT&T-cum-BellSouth-cum-AT&T tandem office. It's where end offices (that connected to actual customer phones) would be connected together and connected to inter exchange carriers.
AFAIK AT&T tended to build their tandem offices as reinforced style buildings. They are larger than end offices and needed high availability because they were the central node for a region's telephone network and its connection to other networks.
I don't think I've ever seen any central office in a regular home in a neighborhood. Even end offices, while smaller than tandems, required a lot of equipment and power backups. Besides the equipment in the building they'd usually have secured parking/storage for service vehicles.
In both cases it was a housing tract that was allergic to ugly buildings or something. The vast majority of RSUs looked like smaller versions of the CO. Gray cinder blocks and asphalt.
Sometimes these central offices are put in really old buildings. Sometimes they are even put in regular homes in a neighborhood.
It’s simply based on where they need the connections/circuits and have access to electricity, etc.