It's hard to imagine that it doesn't block cell phones. To get cell coverage you would need a micro-cell inside the apartment. Enabling encryption on the WiFi seems easier to me :-)

Retail stores will use this to prevent "showrooming" - where a person goes to a store and looks at something, then buys it from Amazon with their phone.

Ok, so people will still buy from Amazon, but they'll have to leave Best Buy first.

Isn't it illegal to jam cell phone reception deliberately ?

It's illegal to jam cell phone reception by transmitting on frequencies that are allocated to the cell carrier. I doubt it's illegal to passively prevent radio waves from entering your own property.