A phone is fully functional and connects to the cellular network automatically. Before they let you USE that network, they need to know who you are, and that you’ve paid for your ticket to ride.
That SIM is your ticket to ride the cellular network. Otherwise, you’re only allowed to make emergency calls.
Your phone can still be used for games and apps, as long as you have an account with Google/Apple/Samsung/etc. You just need to use WiFi for Internet access. You can even use WiFi for WiFi phone calls/video calls. Once you are away from that WiFi hotspot, you’re screwed. That’s when the cellular network connection takes over, and you need that “ticket” again.
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