Did as you requested. Sim was not selected and still is not. I also had a choice of 'all contacts', 'customize', 'by account' (I have 2), Phone, SIM
If I select 'phone', then 'by account' highlights, but I can't find any of my contacts when I then go to 'people' widget. If I then deselect 'by account' and only have 'phone' selected, the same thing happens. I like to be able to scroll through all my contacts and not have to go to 'favorites' 'groups', etc. If I can't do that, I'll find another phone book app. I'm pretty fed up now as my M8 was so much better in this regard. You'll notice that even though SIM is not selected, it says SIM beneath the contact name.
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