As in bypassing the telcos for short distance communication, for example for text and voice communication within an office complex.
The technology certainly exists as proven by mesh networks such as Meshtastic etc. and modern phones are already packed with transceivers covering multiple frequencies and protocols.
The big players such as Apple and Samsung don't seem to be wedded to any particular telco so there is no great motivation to be locked into the telco model, which incidentally is just a complete mess with extreme regional fragmentation and lack of cooperation between providers.
You could do that but it makes little business sense - unless there is some open standard everyone uses (there isn't) or everyone has the same device/phone from the same vendor (not realistic) it wouldn't work. There is also very little commercial incentive in developing something like this because there are already better solutions available for addressing this problem.
Also that you can connect to a phone BTS a kilometer or two away with your phone doesn't mean that the same transciever will be capable of "hearing" another such radio two rooms away behind several walls. The BTS has huge (compared to the phone) antennas so it can hear the puny signal from the phone far away and has a fairly powerful transmitter as well. Phones trying to talk directly to each other at these frequencies used by the GSM/LTS/Wifi/Bluetooth networks would work well probably only in an open space, not in buildings full of concrete walls, rebar and interference. Never had situations where you had poor reception unless you were right next to the window? Now imagine you aren't talking to a BTS with 100W of power and a large antenna array on top of a building or a hill but a 2W (max) phone somewhere in the basement. Ain't gonna happen.
Short answer: probably never because they have absolutely nothing to gain from that, and if "offline" communication ever became mainstream, governments would ban it in an instant.
That is not quite true. Back in the late 90s/early 2000s there were phones that had a "walkie-talkie" function (PTT - "Push to talk"), for this purpose. It is not strictly speaking "peer to peer" (radio talking directly to each other - it used GPRS over the GSM network and you still needed to have the service supported by the network) but from the user's point of view there was little difference.
So this kind of feature has been tried already. E.g. Nokia 6101 series had this function. It didn't quite take off in Europe, though, because there is zero advantage in it for consumers over just making a regular call/sending a text. And if you really need a walkie talkie instead of a phone (e.g. when staffing events or to communicate inside of a warehouse, hiking, camping, etc.), then these are cheaply and widely available.
Modern smartphones also have plenty of apps available for such peer-to-peer messaging over IP (e.g. corporate wifi) or even directly over Bluetooth. However, for companies this makes little sense because it would be a security and compliance nightmare trying to secure the vast array of personal devices brought in by the staff.
Concerning the conspiracy about governments banning something in an instant - come on. Spare that tinfoil hat. As if you couldn't buy a cheap walkie-talkie radio in almost every supermarket or sports store, no license, registration or subscription required, as "offline" as it gets.
And if you want/need something more powerful, with more range then there are options as well, such as:
https://myrealmobile.com/push-to-talk-ptt-over-cellular-rm-1560-dual-4g-lteanalog-radio . That is a 70cm radio + 4G LTE phone in one, if you really need this capability. Or one of many trunking radio systems (e.g. TETRA) widely used by taxi services, fire and rescue, etc.
Most people don't need this, that's why it isn't widely sold, not because some government cabal has banned/would ban it.
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