Sorry if this is a dumb question but how does it use the number if it isn't uploaded?

Of course you need to tell the server the number you want to call. That’s the basis of any VoIP application.

But you don’t have to upload every contact neither you have to send any information associated with the number.

This seems like the crux of things. Yes, contact information is sent from your phone to the internet. Therefore they need that flag for their app. Seems things are working as intended? The app is still free to tell the user a more nuanced privacy story if they want, right?