It's pretty common for me to have contacts with name, phone number, and postal address, or sometimes just one or two of the three, and no email. How do I handle them in the calandar when I want to add them as attendees? As it stands, I just add them in the title or location fields.

If I understood correctly, it does not allow to add attendees without email addresses?

Yes, that's correct as I understand it. That is, I can add a name to participants field, but there will be complaints when I try to save, "is not a valid email address", "are you sure?", and the name will not be saved. The "Select Attendees" fields will only show the name portion of contacts with email entries.

I should add I can fake an email address that will show in "Select Attendees" fields e.g. "Name <Name>", but it is still no good when saving an event, as it is recognized as fake. A validly formatted undeliverable address is fine, however.

This looks like a missing functionality, so please file a bug on bugs.kde.org (severity "wishlist").