Yes inmates really do use the toilet in the prison cell in front of other cellmates if they have to go to the toilet.
Some inmates might hold it in until the inmate is let out of the cell for awhile and then use it and others might wait until their cellmate is asleep before using the toilet.
But most inmates will just use the toilet in the prison cell in front of the cellmates because they have no other choice.
The other prisoner will know that you need to use the toilet and they might look the other way but if not then you still need to use the toilet and should use it.
The other inmate will need to use the same toilet as the other prisoner as well.
So it's not like the other prisoner doesn't know you need to use the toilet in the cell and they are likely just as embarrassed as the other prisoner even though they don't show it.
Some prisoners may wait to use an external toilet in a shower room but when a prisoner really needs to use the toilet they will do so.