On the telephone, the person answering it may say "Who is calling?" or "Who is this?" Why do you say "this" to the caller on the other end of the phone? Is is wrong to say "Who is that?"
"This" and "that" are used to reference something. "This" usually refers to something close by. "That" refers to something far away. So the distance differentiates "This" and "That. The distance does not have to be a physical distance but could be a metaphorical distance too; closeness in time or similarity. You can say "Who is this?" to someone on the phone (close to your ear). But you say "Who is that?" to someone on the street while you are sitting in the living room. I hope this clears it up for you. Otherwise, the confusion continues and we don't want that.
You would say "Who is this" because this is a Predicate Nominative and shares the same context as the subject. For example, both "Who is this?" (Subjective) and "Whom is that?" (Objective) are correct. Also, "Whose is this?" is also correct (Possessive).
It may not be technically wrong but it sounds just a bit awkward to me to say "Who is that?" over the phone.
I agree with Pickle55 for the most part. "This" seems to me to imply something which is immediately at hand, nearby physically or in time or more intangibly, something involved in my current conversation or activity. "That" seems to be external, far away physically or temporally or metaphorically outside of my current conversation or activity.
I found a very simple article here describing the way these two words are often used in common American speech. I have no clue if that's a valid reference or not (I need to read the rules about citations) but it made sense to me.
I say that it sounds awkward in the sentence "Who is that?" only because it seems just off to me, so its only a matter of my personal opinion.