I have unique cards generated for online transactions, and I see this feature with multiple banks here in the UK. It seems mad that this would be considered a bad thing.
Visa/Mastercard likely don't supply a way to link a physical card to it's virtual card generations (that'd be a security risk), so Google doesn't know that virtual card A is associated with physical card B.
Can somebody which knowledge of this explain problems with "privacy" cards and why scammers love them?
Scammers don't care about privacy cards. They'll use anything they can get their hands on, metaphorical or otherwise. If it doesn't have their details attached, it's fair game to them.