Yes it’s illegal but because the car dashboard usually is placed in a better position than your hand/phone and also because you don’t chat with the car :) but in the end yes it’s a bit pointless ban the use of a phone and allow a “big phone built in the car”.
You can hold your hand/phone anywhere, including at the same level as your windshield, so that you can look at it without turning your eyes away from the road. Below the dashboard always puts your whole windshield in your peripheral at best.