It's a small step, but does not solve the issue of location being tracked to start with. A better law would be to ban the tracking of location without consent, along with banning requiring location tracking for services that don't technically require it.
Grouchy
It depends on what other data your ISP has vs what other data Google has. If Google knows more about you, like web history, then it can correlate the data to create a more complete profile. The reverse is also true. Pick your poison, there's really no privacy either way.
I host my own. I'd say my contacts are split between XMPP and Matrix with many people having both. A lot of business use self hosted XMPP servers too. For example, Cisco communications solutions are based on XMPP.
The issue with free public servers is that you have no accountability. If they go away, or are left unmaintained, there's nothing you can do about it.
My two cents, host at home, or at an infrastructure provider you pay for service.
That's lip service to privacy with spyware in reality.
There is no such thing as a private cellular device. It does not matter if it's a smartphone, dumb phone, or simple internet access device.
Cellular devices are location tracked and their owners profiled. All devices have proprietary cellular modems that communicate over the network and have full access to your system. Nothing you do on device will stop that.
The only exception I've heard of is from Purism. The Librem 5 claims to separate the base system from the cellular modem, but that still won't stop the location tracking.
Point blank, you can't carry a connected cellular device, and have privacy. They are mutually exclusive goals.
Host your own instance. Then you have full control.
A land line that I avoid using unless absolutely necessary. There is no such thing as a private cellular device.
Prosody here in addition to Matrix. :)
I use Matrix too. I've hosted my own Synapse instance for almost a year now. It works great. Easy to maintain and upgrade.
The act of collecting the location data should be illegal. Selling it should never have been possible.