I had a provider before that blocked tethering and hotspot, the solution there was also to increase TTL on the clients connecting to the phone by 1. The phone would lower it by 1 again, making it look like data originated from there.

It’s possible to track the number of hops that a device on a network has, since TTL will be 8-bit numbers (and ususally start at 64, 128, etc.) if the TTL of a packet has 64 from the main device, the devices it’s sharing with will be 63 (and so on un the chain for N+1 hops). This may not be exactly how they do it since device fingerprinting would be way simpler, but it is a plausible way of tracking that a device is using a hotspot.