I tried to look this up, and I found people saying you don’t need an Xbox Live account, but you still need a Microsoft account. Would appreciate any authoritative source that can answer the question.
You need a Microsoft account to do anything with an Xbox One or Xbox Series, including playing offline games. If you don't have one, you get a series of prompts to create one. Doesn't need to be linked to anything, not even an email.
If this is being used to bypass a ban, the console will get banned.
Isn't the accessory line pretty blurred with a device like the Apple Watch? The Apple Watch is about as powerful as computers from the 2000s (if not even more recently)[1] & has it's own line of accessories [2], & has its own cellular & WiFi connections. In theory Apple could make setup not require an iPhone if they wanted & even allow wireless displays. Smartwatches really are more companion devices that are tethered to phones to speed up the setup/input process & the phone acts like a smarter virtual display.
[1] Can't find the speed of the latest one but the S5 is a 64-bit dual-core 2.4 Ghz CPU (I think the S6 is 20% faster than that?) with 1 GB of RAM & 32GB of storage. That's a pretty hefty device & will eventually consume a lot of needs for a phone.
[2] https://www.apple.com/shop/watch/watch-accessories
I believe Apple is already heading in the direction of independent watches. The latest update lets you set up a new watch for family members that don’t have an iPhone. After the setup it will function independently. Right now it’s mostly meant for kids.