This is true, LineageOS is mainly used by people that end up installing Google Play Services afterwards. They have said themselves that 90+% of people install it on top of Lineage.
They are also very afraid of pissing Google off, and thus they are extremely against MicroG which is an open-source phone-side API for Google Play that is more privacy preserving. For example it replaces the location service with alternatives and supports firebase push messaging without sharing too much data. But Lineage hate it, if you so much as mention it in their IRC channel you get insta-kicked.
I view Lineage not really as a privacy ROM but more as a long term support ROM for the people that want normal Android with Google but their phone has fallen out of support from the vendor.
PS: There is a great fork from MicroG itself: https://lineage.microg.org/ . Of course not using Google at all is even better but the problem is that most app backends only speak to Firebase (google) for their push messaging.
> I don’t like Google knowing so much about me, but I don’t believe Google’s data collection is directly harmful to me. My disapproval of Google’s activities (and I know Google is not the only culprit) is mainly one of principle.
For me it's not about harmful or not. I just don't want to be spied upon, whether I receive negative effects from it or not.
> I don’t want to be a source of revenue for Google, or to legitimize their behaviour by my own inaction. I don’t want Google to make the Internet more of a hellscape that it currently is.
Well Google and their model of tracked advertising goes hand in hand with enshittification. They're responsible (though not single-handedly) for establishing the model of 'the user is not the customer but the product'. Kowtowing to their services will certainly make things worse.