Webform creating duplicate contact
Per Karin's advice, filed bug report on Core - https://lab.civicrm.org/dev/core/-/issues/1767. Filed a separate one for webform_civicrm - https://www.drupal.org/project/webform_civicrm/issues/3137284. Both are needed for our use case.
I proposed patches with each issue, should anyone else run into this before it is fixed properly. BTW, good to know that the phone match is based on digits only. All formatting &amp; decorations are stripped off.