The simplest reason is because of the fact that the phones microphone and speaker point in different directions.
The speaker projects sound outward, away from the microphone – this means that for the microphone to pick up any of this sound, the sound needs to travel away from the phone, reflect off of something and bounce back towards the mic. Generally any sound that does this will have been attenuated enough as to be a lot, lot quieter than someone intentionally speaking towards the phone, so it won’t be heard by a mic tuned for human voice levels.
The second trick that can be used are various forms of active noise cancellation. Because the phone knows what audio signal it is producing, that means it is able to listen to the incoming audio and cancel out audio that matches the sound it is making.
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