While I'm very privacy conscious, I don't really see the benefit to hiding my region in the DNS request. Because the very next step after the DNS is my browser making a request to their webserver, at which time they will have my actual complete IP anyway.
> EDNS IP subsets can be used to better geolocate responses for services that use DNS-based load balancing. However, 1.1.1.1 is delivered across Cloudflare’s entire network that today spans 180 cities. We publish the geolocation information of the IPs that we query from. That allows any network with less density than we have to properly return DNS-targeted results.
On the other hand, it's possible this doesn't matter. The client might not encrypt the host it's trying to visit. Nation states can correlate packet timing. So if someone really wants to know, they'll probably figure it out. (This is always a risk with things like Tor. If the government is monitoring your connection and some target website's connection, and you are sending a lot of packets at the same time they're receiving a lot of packets, you can guess who is talking to who.)
It's not just the website's DNS server that received your subnet information; it's every single location in the chain of DNS resolvers. That includes TLD servers run by data mining companies. Does Verisign need to know that 2001:2345:6789::abcd is looking for news.ycombinator.com?
With caching in place these methods of data gathering aren't all-encompassing, but if you visit some new or uncommon domains you'll be more likely to become part of the dataset.
So the main difference is that Cloudflare's servers need to be present in the IP geolocation database. Given their prevalence, they're probably in most of them already.
If that were true, there's a lot of really stupid people throwing away their money by paying CF to hack them.
This isn't true, because the request leaks the hostname in the handshake via SNI:
Verizon wouldn't know that even with ECS, because ECS only needs to include the subnet prefix of the length that the client (Cloudflare's recursive resolver in this case) is willing to give out. There is no benefit and only harm to the client if it gives out the whole IP, and indeed it is called out as a bad idea in the ECS RFC.