Creating 1/1 cats by simply tapping your 1-cost dude seems busted. Even if the creature itself was a 1/1, I would expect it to cost some 3 mana, ie. Thraben Doomsayer or the ability would cost along those lines to active plus a tap, say Oviya Pashiri, Sage Lifecrafte.

That it's potentially a 3/3 for 1 that can also attack as such it's another discussion topic entirely but even mostly ignoring that it's notable that with 3 toughness is harder to remove than the likes of aforementioned Doomsayer.

Even ignoring the mana ability altogether, a 3/3 for that etbt is on the same level as Wild Nacatl - a card which sees wide competitive play - while having not deck building constraints to maximize its effectiveness. It would likely take the slot of Nacatl or act as additional copies of it. In general, it seems unhealthy development wise.

That it on top of that can also tap for mana seems nuts. That being said, you would generally not be interested to tap your 3/3 except in specific circumstances which is especially pronounced with it even keeping it tapped for an additional turn.

Can you run me through the logic that would paint this as being even remotely balanced? Right now it looks like a Delver of Secrets that's instantly online (so you don't need anything in your deck to make it more likely to turn online) and it also has extra +1 toughness on top of that.

Entering tapped is a drawback so minor it ain't even worth a mana of a discount. I would imagine that this sort of card would cost around generally - would still seem like an absolutely powerhouse for limited if printed at common. Maybe you're confusing the design with being superficially similar to Sleep-Cursed Faerie?

Even after all these years, Phantom Monster is not that off-rate funnily enough - for example Threadbind Clique and Storyteller Pixie.