Additional contact-related features and issues within Microsoft Teams Free
The advice you have received from Q&A Assist AI bot refers to users with a business account. It is not applicable to Teams Personal account users.
It appears that Microsoft is changing now how contacts are managed in Teams Personal. The option to sync contacts from Outlook is currently not functional, but there is no official documentation available on whether this is a temporal or a permanent change.
The contacts listed from the People tab, appear only to apply to contacts migrated from Skype or contacts from phone address book. This feature is not useful for new Teams users.
Based on my own experience. what will work is to search for new contacts using the Search option at the top of the main Teams window.
Alternative is to make use of the "Invite people to Teams" option. This option will generate an invitation link which can be send to your friends using email, SMS or any other communication media.
These seems to be the options available now, but everything can change in the future.