I figured it out. I'm a moron.
It's not really assigning the 'Phone Only' policy to users, it just looks that way when I right click on a user's name and select Assign IT Policy.
The 'Phone Only' is the one that shows in THAT dialog box. However, if I'm just looking at the new user via the Managment console (showing the IT Policy column), I do see that they are, in fact, assigned the 'Default' IT Policy.
UGH. Time for more hair color. Or maybe less.