I would use this version, although I would personally leave out “that”.

You might say, “I understand your phone IS broken…..” if it is a fact that the phone is actually broken. “IS” indicates that there is no doubt in your mind, that the phone is broken.

On the other hand, “May” offers some uncertainty regarding the current state of the phones functionality,

What is more, “May” could also be perceived by the other party as an indication of doubt on your behalf, regarding the idea that the phone is broken,.

In this case, “I understand your phone may be BROKEN but please text me.” is perfectly suitable.