The other really stupid thing, besides generally hurting the adoption of 2FA forever, is that they probably did it for hardly more than scraps, compared to their conventional add targeting capabilities. Maybe I am completely wrong about this, but I'm pretty convinced that almost all of the ad spending for that feature would have reached Facebook's coffers anyways had it not been available.
At Facebook's scale even the scraps can be worth millions. And the sad truth is that the vast majority of people will not be deterred by, be aware of, or even understand the fact that Facebook is abusing their phone number in this way, so as far as Facebook is concerned it's a small bump in the long road to increased profitability.
Sure, but the same is true about negative headlines, the effect is just more difficult to quantify.
Maybe it's a general world view problem within Facebook, but usually these things are the result of one overly ambitious person or group optimizing the singular bonus metric of their own little fiefdom at the cost of corporation-wide commons. Big organizations need to be extremely vigilant in their defense against internal foes who won't blink an eye costing the company billions for a gain of millions add long as the latter will be attributed to them while the former won't.