Correct GWM, the whole phone locks.
I set it to 1 minute because I live in an area where there's a chance of being mugged, and I'm vulnerable. Or, heaven forbid, I could lose my phone. I did years ago, when it slipped unnoticed out of my pocket on a bus.
My contract gives unlimited calls and if it wasn't locked some druggie could add it to his collection of disposable phones, call his bruv goodness knows where in the world, or use it for premium rate numbers. Only the SIM card will be of any use to them; the phone itself is worthless.