I’d guess the simple answer may be that people don’t care/know, but for those that have ditched Facebook for whatever reason, yet still use Instagram, it’s a little surprising.
Is it partly a result of it being a more focused/limited form of social media that filters out some of the stuff people didn’t like from Facebook?
I think people underestimate the scale of surveillance/tracking. People lump it in with “oh it’s just advertising”, similar to all the commercials you watch on tv. But it’s a completely different beast. Personally my eureka moment was when I set up a pi-hole and saw the staggering amount of creepy tracking on my devices.