Because not every app you download needs to know all of your information

Apple tracks all of my data on their own. I know this, and do what I can to limit it.

I still have control over what the apps have access to. For example, only a handful of apps have access to my cellular data. Nothing else needs it, and I am prompted when I launch an app to change the setting if I want to. This prevents them from doing anything unless I’m on Wi-Fi. Same with location, I have it enabled for 4 apps, and get notifications frequently that I can change my settings.

Sure, I have to trust them that they aren’t sharing that data even when I ask them not to, but given apple’s track record, I’m reasonably comfortable with this until a Linux phone is good as a daily driver.

It’s the same thing. And frankly they are probably just playing catch-up to what apple already does.

If you trust google with that info, you should trust them not to share it when they say they won’t. If you don’t trust them with it, you need to get off android, because they have it anyway.

They're not as extremist or powerful as you seem to think.

Who are they trying to fool here? Any person who is truly aware about privacy knows Google cannot trusted in this domain.

They're trying to fool those that are not aware. Which is almost everyone.

You realize Android is open-source and you can actually audit that all those features actually do what they claim to do, right?

Principle of least privilege is a good thing, even with Google's apps. Maybe Google can get all that data from elsewhere, sure, but it still reduces the potential attack surface even in their own apps. So Gmail can't be exploited to get your location and pictures. Chrome can't be exploited to get your emails. YouTube can't be exploited to get your location. Even internally, Google is a huge company with loads of employees involved. One could get rogue and add a backdoor, it would only get what that specific app has access to even though Google as a whole can probably get whatever they want.

Plus, I'd say even though I distrusr Google, I still trust them more than I would trust Facebook, Twitter, Reddit, or basically most third party apps. My weather app just doesn't need to know anything but my rough location. My bank app doesn't need to know about my location at all, even though I trust my bank with my money. My health insurance app sure doesn't need to know about anything whatsoever. No apps ever need my phone number or IMEI.

With the previous system, there was a lot of apps that bundled ad libraries that would then send out notifications pretending to be other apps, install other apps without the user's consent, collect every bit of information possible operating out of Russia or China where you have zero legal recourse.

You may not trust Google, but they have clear, legally binding policies about what they collect, how they use it, and you can potentially sue them if you can prove they misused your data. You can't say the same about TikTok for example.

The privacy controls benefit everyone. It benefits Google in Android not being seen as a free for all. It benefits users who can and do deny a lot of those permissions. It protects users from apps just getting everything and actively kicking those apps out the Play Store. You can even revoke most of those permissions from Google's apps if you want. If you flash LineageOS without Gapps you still get all those privacy features without Google's involvement at all.

Privacy is not a binary thing. Most people don't want maximum privacy, they'll happily give their location to Google so Maps work. That doesn't mean they don't care and want TikTok to have it all too because Google can.

Your reasoning only makes sense from the point of view that Google is the biggest threat to your privacy in the world amd that everyone else is good. There's far, far worse than Google.

Who are they trying to fool here? Any person who is truly aware about privacy

You answered your own question. Most people are still living in the Dark Ages when it comes to privacy awareness and just general tech literacy. To them, Google's "privacy" features actually sound impressive.

As for why Google bothered to introduce such features: like most things in the mobile world it is about not losing ground to Apple in the features race. Google never cared until Apple introduced their own "privacy" features a few years ago. They know Apple is a dangerous competitor due to its ability to gaslight consumers into thinking it cares about them, so they are attempting to do the same here. It's all about creating the illusion of being a pro-consumer company.