Ambiguity in choosing the best ER model

Question

I am actually little bit confused when I am reading through the text - Database system concepts by Henry F. Korth and others

I won't be able to understand one thing, which one of the following models I have to use when I have to design the ER diagram.

As the textbook says:

We are going to treat the telephone as an entity when one may want to keep extra information about a telephone such as its location, or its type (like mobile, video phone or a plain telephone etc) or all who share the telephone. Thus, treating telephone as an entity is more general than treating it as an attribute

What I want to clarify is: If I draw the ER diagram by choosing telephone as a composite attribute having component attributes: telephone_number and location. Then I can also define the same way as an entity can do. Is it not correct to do it like this way?

If it is correct then what to use and when? If it is incorrect then why is it so.

one reason may be one person cannot have multiple phone numbers but we can design the same by making telephone as multi-valued attribute. So where I am going wrong?