When they launched Overwatch 2, you couldn't play if you tried to verify your account with a prepaid phone. This was problematic since they closed Overwatch 1 servers (it's a paid, online only game) for Overwatch 2, a free to play game.
Some people found themselves that they could no longer play the Overwatch franchise after having bought the $40 original game because of this. This was later rolled back and they allowed prepaid phones. So they can definitely distinguish them.
Is there some way they can check with the provider for a given number? Seems less than ideal from a privacy perspective.