Earlier quoted context omitted.
That's a good point in general; NIST recommends not using SMS for challenge-response authentication. I don't know whether in this case the victim was using SMS codes, or whether the attacker used their phone number as part of a more involved attack (e.g. calling customer support and impersonating the victim). Even if you don't use SMS codes, there are a number of attacks that are opened up if someone seizes your cell…
I work in fraud prevention. While it's not yet a typical attack, it is does happen regularly. Usually the attack is done against an individual who is known to have significant crypto assets and is using Gmail. By default if you enable 2fa on your Gmail account, sms based 2fa is activated as backup. The attacker social engineers the phone provider to port the victims number, then resets the victims Gmail account, uses…
Now there is https://landing.google.com/advancedprotection/, which might be a better option -- interested to know if you've got any opinions on that scheme.