Can't add a contact with no email address. if the list contains a contact with no email

when I try to create a distribution list, it will not add a contact with no email address, if the list contains a contact with no email . I have to add a fake email and then the contact can be added

Why would you want to add a recipient who does not have an email address? It will not work if you try to send an email to someone without one.

I was going to text them.

But my phone does not see the list in contacts. 

That is because a distribution list is not a contact. You can’t save information like a telephone number or physical address in a distribution list. All it is, is a list of names and email addresses. It is not really connected to existing contacts. If for example you made a distribution list including Bob from your contacts, then at some later time you changed Bob’s email address in your contacts, the distribution list will not have the new email address.

I think what you are trying to do is group your contacts in some way. The best way to do that is to use categories. And if you are syncing with Google contacts, those categories will be transferred to Google, and then on to your phone as well.