It does, yes.
And since lots of people in the Fediverse support blocking popular competitors, like people in Mastodon talking about blocking/unfederating Threads, I’d say we’re making sure the Fediverse stays in obscurity forever. Never having a chance to become popular, never having a chance to convince people to leave proprietary platforms.
Your posts are only public if you set your profile to public. Otherwise, they’re private. But even if they’re public, I’m pretty sure an instance can make them almost private (as in: you can only see the data if you’re federating with them).
I agree that most of the instances don’t make things private at the moment (I think), but at least they can protect your information if they want to.
But anyway, federating or not, Meta and other companies are already tracking everyone one way or another.