They’ll give you a $1000 phone under the guarantee of a 2-year contract. That can be considered a type of loan and they can repo the phone if you stop paying.
If you stop paying monthly bills, they can only really force you to pay the balance if they have your SSN and can affect your credit score.
I’m not endorsing the practice of ruining people’s chances of buying a home over unpaid phone bills, but it’s a pretty good deal from AT&T’s perspective.