Agreed... Feels like everyone is falling for this hook, line, and sinker.
The goal is to get people back on Reddit, doesn't matter what you're doing. For how many people are still on Reddit complaining, it clearly doesn't matter that much to people.
Hard to say exactly what Mastodon does, but mastodon.social's privacy policy should give you some direction in how they handle data: https://mastodon.social/privacy-policy
As mastodon.social is based in Germany, they will know about GDPR and have to follow it to the letter.