The answer depends on what you expect from it.
If your goal is simply to enjoy a subtle bay leaf fragrance, the trick may work to some extent because dried bay leaves naturally release aromatic compounds.
If, however, you’re hoping to protect your phone from insects or achieve a guaranteed repellent effect, there is little reason to consider this a reliable method.
Ultimately, the bay leaf in the phone case is mainly a curious DIY household trick that went viral because it is simple, inexpensive, and easy to try.