A lot of people in this thread are mixing up the FSD option (that you buy for your car) with the invite-only FSD beta. Currently the non-beta FSD will drive itself on limited access roads (basically taking you from onramp to offramp, changing lanes, taking interchanges, etc), but it's basically cruise control on surface streets. The FSD beta will self-drive pretty much anywhere (even parking lots) but it has only rolled out to a few percent of Teslas. Both versions use cameras inside the car to monitor the driver's attention. If you blind the internal camera, the car will refuse to engage autopilot or FSD beta.
If you're seeing "egregiously dangerous" behavior, you should call the police. The dash cam should be more than enough evidence to get the reckless driver charged.
You can't use autopilot or FSD while on your phone. I've tested this myself. Within a second or two you're alerted to grab the wheel and look ahead. If you don't, you'll get locked out of autopilot for the rest of your drive and your safety score will be dinged.[1] Tesla's ML algorithms even have a classification of "PHONE_USE" for the cabin camera.[2]
If you're seeing "egregiously dangerous" behavior, you should call the police. The dash cam should be more than enough evidence to get the reckless driver charged.