Thanks for reaching out to Microsoft Q&A
There's no limit attempts for SMS sign ins, what I suspect is happening is that Registration Campaign feature is enabled and requesting your users to register Microsoft Authenticator application for MFA as per the screenshot below:
If you are not ready to use Registration Campaign, you can disable it following these steps:
1 - Sign in to the Microsoft Entra admin center as at least an Authentication Policy Administrator.
2 - Browse to Protection > Authentication methods > Registration campaign and click Edit.
3 - Select Disabled to disable the registration campaign for all users.
https://learn.microsoft.com/en-us/entra/identity/authentication/how-to-mfa-registration-campaign
Regarding your SMS query, although it's encouraged and recommended to use MS Authenticator app due to security concerns, Microsoft does not have plans to remove SMS option as an Authentication Method as of Today.
Thanks,
Fabio