I could be wrong but i believe the image that's making the rounds re what permissions the app CAN use, are just that, potential things it can do, not things it constantly does. Facebook (and so i assume Instagram and threads since its the same system) supports methods of payments like google wallet and linking a credit card. Its kinda like how when you sign up for these things you give them "permission" to use your pictures etc, because obviously they need that permission in order to actually show your images, it doesn't mean they can just do whatever they want with photos you upload, same for financial info.
XMPP is still alive and well as a protocol, google just kinda stole it (other stuff still uses it too tho but unfederated). I know the majority of folks i talked to over XMPP were actually just using it because it was part of google talk, then hangouts, then google decided to defederate hangouts and eventually killed it alltogether but people moved to facebook or whatsapp for the most part.
Also I think the timing was off for XMPP, in large part people who used it also still used IRC for groups even though XMPP also supported groups you didn't really see major open source projects making XMPP groups to go along with their IRC channels like you have with matrix. Now what we really need is for discord to join with Twitter and Reddit in enshittification of their products so average folks get fed up enough to move over.
I bet these will sell like NFTs, and be just as useful.