[baystep]

Yes, but if (it seems more like when) a collision happens in a situation like this, aren't we essentially saying someone is connected with someone they don't even know? I feel like detecting the collision takes more computation then just sending the whole hash right? I mean in consideration of the scale that Signal/WhatsApp/etc are with millions of phone numbers

[jsjohnst]

With a couple GPUs you could find out if there is a collision on phone numbers with truncated hashes pretty quickly. If the phone numbers are normalized, except for a few edge cases, the space is twelve digits which can be naively brute forced. A trillion SHA-1 hashes isn't that hard to do these days.