Is an unlocked iPhone 5, iPhone 5c and iPhone 5s truly unlocked?

I had previously asked this question before but those who answered didn't actally attempt to comprehend the question, even with two additional updates added to the question.

I completely understand how unlocked phones work but the question I have is how do unlocked phones function when lost/stolen or in an insurance claim - go unreturned?

Well, the reason I ask is because I originally filed a claim with an Assurion for defective iPhone 5c. This was previously replaced by Assurion and is confirmed to be refurbished. Well, the device went missing after the filling of the claim. Unfortunately, since this claim is "Completed" with Assurion it can't be modified. Which means, Assurion is expecting a device be returned that we don't have.

Unfortunately, I do not have too many details beyond that this particular line doesn't belong to me.

Per Assurions policy, if a device is not received within ten days, they will charge the payment method up to $300. Unfortunately, that appears to be the only route. We're concerned/curious even more so because the device is unlocked. We want to know if the device is ever recovered, will it still work? So since this will technically this will be an Damaged Device not Lost/Stolen…

Does anyone have any experience with this? Will the MEID be blacklisted, is that even possible because the device is unlocked?

We want to recover as much of these expenses as possible…

If you reported it lost or stolen then yes it will be blacklisted.