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Hi Ego1st,
I thought the same as you, but I found out that if actually does t9. Only, it shows the contacts that have matching numbers to your input, on top of the list.
So, if you type a few more numbers, then the names will be on top of the list. Also you can scroll down the list.
that **bleep** 
any chance that by any update or by lollipop this will be returned?
There's no info on that ATM, you could contact your local Xperia Care
http://support.sonymobile.com/global-en/contactUs/
also you could download a different phonebook.