Have enough developers really been conditioned to accept surveillance and pervasive centralized control that someone thought this was a good idea? The fact that the telemetry code even exists is a problem - both in case of a bug that turns it on, and what it says about the proclivities of its developers.
It's utterly inappropriate to refer to this as "the Rust-based terminal", as if the language is its distinguishing feature. More like "the obscene SaaSification of a basic foundational utility". I'd be very much interested in trying a new terminal written in Rust, which could presumably be quicker and have a smaller chance of hiding latent parsing bugs, but this most certainly is not that.