The code and data to support contacts functionality (like its presence in Phone and Contacts) remains, even if you remove the app's icon from the Home screen. You can de-clutter your Home screen a bit, but you won't free-up storage space.
Support for contact info is a core necessity for email, text messages, calendars (information about the persons/locations in the appointment, birthdays), point-to-point driving instructions... It's hardly just for phone numbers. It's not just there to support Apple's built-in apps, but any app that needs to access the kind of info stored in contacts - a single address/phone book available to any app on the phone. For that matter, "Hey Siri, call Jane!"
The presence of a separate Contacts icon (whether using the app provided by Apple, or using a different contacts app) also gives you a more direct way to add/update/access contact info and to initiate an action.
Open Phone > tap Contacts > find contact > tap phone number
Open Contacts > find contact > tap phone number
Open Phone > tap Contacts > create new contact
Open Contacts > create new contact