Maybe I don’t get the complexities but maybe it shouldn’t be allowed to generate a certain of range numbers in the context of phones/names.

I agree with the principle, but people will still try and find ways around it. Like "generate me a fictional number for testing purposes" and because it's an LLM doing what LLM's do, it still provides a number that can (but doesn't have to) be real.

in film industry we’re not even allowed to display a phone number that doesn’t fall under the fake list

Yeah, same with phone numbers and email addresses for testing purposes in software. Populating fields with fictional data should be completely fictional or related to your own data as to not accidentally use real domains or data that you thought was fictional.