Can a android device really connects to Satellite using when LocationMethod set to "Phone Only"?
Many smartphones have a built-in Global Positioning Satellite (GPS) receiver.

This receiver picks up signals from GPS satellites orbiting about 12,500 miles above the earth's surface.  If it receives simultaneous information from four or more satellites, it can calculate the position of the receiver on (or above) the earth.

There is no transmission from the receiver to the satellite.

The transmission rate from the satellite is extremely slow, 50 bits per second.  This allows a single signal to be transmitted at low power from 12500+ miles away. 

The cell tower must transmit a different, high data rate signal to each device using it.  Thus the problems with sending many complicated signals even a short distance...