The way it works is supposed to anonymously allow the measuring of advertising performance. Which ads do well with which kinds of users. Instead of tracking each individual user this tracks context, meaning what site the ad was seen on etc. Thereby providing a way to know what kinds of ads work with what kinds of users without profiling every individual in the world.
That is what it’s supposed to do. Data still goes to an allegedly “trusted third party” (let’s encrypt, apparently) which then does this anonymization.
The idea is a lot less egregious, but it’s still only a good idea assuming you agree ads would be a good and ethical way to make the internet go round, if only they weren’t profiling everyone. I don’t.