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I'm no expert on Teams but my understanding is the same - no such thing as digit dialing another phone.

Our own cloud platform (Netsapiens) can be paired with an interconnection to Teams which turns the Teams users into extensions on the Netsapiens system. Once that's done, the Teams users can 3 digit (or 4 digit) dial each other. It's accomplished because Teams sends the 3 digit call back to Netsapiens which in turn recognizes the extension number. Netsapiens then sends the call back to the destination Teams user because it sees the Teams user as a registered "device" on the Netsapiens extension.