Firefox? You mean the company they give several hundred million dollars/year? Yeah I don't think they're too worried. They need some number of users on Firefox to prevent anti-trust issues. Which they're on the brink of right now.
There's no need to reduce Firefox marketshare. Most people don't even consider using anything else than whatever is default in their device.
Also, it's not a Google scare tactic or a flex. Every application on the Play Store must disclose the general outlines of their data policy, including the sharing of data. Lying with those checkbox is not a good idea but they are completely informative and put there by the publishing party, so the people responsible for publishing Firefox on mobile just updated these, and this is what is shown when an app publisher say their app is sharing data with third parties.
tl;dr: it's very likely that not a single soul at Google even looked at this, as this is just the regular behavior of the Play Store with apps that changes their data policy or indicate sharing user data with third parties.
That's not the point they're trying to make I think. It's more of an attack on perfection. Like "the alternative is not perfect either so why not just stay with Chrome". It's not a very strong argument in general but it might be enough to keep people from switching.
the alternative is not perfect either so why not just stay
It does work for a lot of people. Seeing they need to change and adapt if they do change, and it seemingly seems to be as bad as what they're using now, why change and face headaches and hassle.
Zen, at least from the few times that I've tried it, also has some major issues that I personally find to be deal-breakers. Like forgetting tabs in a window that has just been closed. If you accidentally close a window that you're working, without quitting the browser, you lose everything in it. As someone who is prone to doing that when closing a tab, it's not ideal.
So you're advocating that Google shouldn't broadcast that firefox is broadcasting your current location? Even though they do this for every other app available on Android, you're saying they shouldn't do this for firefox?
This notice is effectively added by the Firefox developers when they select the ability to enable location services and also tick a box thay they collect data.
So they do this for all apps. Every single app that is in the Android ecosystem. But in your mind they're specifically targeting firefox with this to make people "scared" huh?