Isn’t this the ultimate “let them eat cake” argument? There are many people in the world who can’t afford anything but the cheapest phone.

Those people don't live in the EU. And anyhow the higher cost of the phone are balanced out by the increased longevity and support of the device. Lifetime cost may very well be lower when people end up replacing their phones less frequently and just have to swap a battery.

Has the EU also made poverty illegal?

Sort of? Almost all EU countries have social welfare nets and public services strong enough to have people's basic needs covered. I think in most countries welfare even directly covers basic phone plans.

We aren't in a situation where we need to allow environmentally damaging products here for the sake of the poor because they're not out on their own. This sounds like the old pro-sweatshop arguments people sometimes made about developing countries.

https://www.slowboring.com/p/they-have-homelessness-in-europ....

Poverty is a relative thing, not absolute. As for your link downthread - homelessness has many more causes than just not being able to afford a place to stay.

So what are those many causes where people have money and choose to live on the streets?

IDK, cheapest phones don't work, and I don't think the store price was ever that clear a differentiator, as telcos routinely disrupt this signal. You can easily get the newest flagships, and phones from the next price group below, cheaper than you can get mid-range phones - as long as you're willing and able to sign up for a 1-2 years contract.

Outside of the US and a few other companies, people pay full price for phones.

Eventually, always, but not up front. Poorer people "prefer" somewhat higher price that gets spread out over years, to paying full price up front.

(I put "prefer" in quotes, because it's less of a choice, and more the only option they can afford.)

Most countries don’t do two year contracts - people have to pay the full price up front.