Yes, they block other tracking scripts, but since they have an explicit exception for tracking from Microsoft, it's not a complete stretch to say they were "tracking for MS"; I know technically it's Microsoft doing the tracking, but DDG gives them explicit permission to do so. I think that it's a distinction without much of a difference, and I don't think it's unfair to extrapolate a bit. If they're being misleading about the types of tracking in their mobile app to make Daddy Microsoft happy, why the fuck would I believe their claims that their search engine (which is more or less a proxy for Bing) would be immune from it?
It actually really upset me; I was a big user and advocate of the DDG browser on iOS and Android, but when that news came out it felt like a big betrayal. I haven't used any DDG product since then, and while I have no idea what kind of trackers they block (if any), I just use Firefox Focus now with Kagi search.