I agree that the fediverse isn’t currently super privacy-friendly, although I think there’s also an inherent limitation to privacy on a social network since it’s all about sharing things. I view privacy as having the control over WHAT I share, with WHOM I share it with, and WHEN, and I get that moreso with the fediverse IMO. I choose what information I share, what I follow, etc. The major difference to me is that Lemmy isn’t tracking me elsewhere around the web like Facebook, Google, Pinterest, etc do. The big sites also save our posts and messages even when they claim not to, because things that are deleted are very rarely ever truly deleted.
I would appreciate the ability to send no-knowledge encrypted DMs here on Lemmy. But using PGP is not difficult, will guarantee only the recipient can read the message, and is a skill that everyone who uses the internet should be able to do anyways.