IANAL, but my understanding is the most effective way to run your own server is to have it completely hidden, e.g. behind classic HTTP authentication so that nobody but you can even see it's a Mastodon server, and definitely can't see anything the server is ingesting, without first logging in.
Even then, if you're a resident of California, your server "collects and maintains personally identifiable information from a consumer residing in California who uses or visits" so you need a privacy policy for yourself, legally speaking. See how much work it is to be legally compliant with laws that never really considered your use-case but apply to you anyway?