On twitter[0], they claimed the main thing they were after is a very rough geolocation with the dns request. Country level, or at least continent level. So they can respond with a nearby data center.
That doesn't sound too bad, privacy-wise.
EDIT: I mean if you were to map all US IP's to a single canonical IP for instance.
[0] https://twitter.com/archiveis/status/1018691421182791680