The below document which indicates ParentID is a lookup field is incorrect, that will be updated. The parentID field is indeed a master-detail field but the required value is only enforced on the page layout.
The master-detail relationship field (which is the field linking the objects) is required on the page layout of the detail and subdetail records.
Refer to:
https://help.salesforce.com/s/articleView?id=sf.overview_of_custom_object_relationships.htm&type=5
As per product team the document indicates wrong field type for parentID. It should be master-detail instead of lookup. They will be updating below document
https://developer.salesforce.com/docs/atlas.en-us.object_reference.meta/object_reference/sforce_api_objects_contactpointaddress.htm
https://help.salesforce.com/s/articleView?id=sf.overview_of_custom_object_relationships.htm&type=5
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