Short version: Facebook will show you a list of people who have your number in their phone. For me, this list of eight people outed a friend as being secretly gay and an ex-girlfriend from long ago who still has my number in her phone.
Try it: Create a new Facebook account using an unused email address. Facebook will insist you add a mobile number as a security check. It will then show you a list of 'people you might know' - this list is people who have you in their phonebook.