By default Firefox collects data and sends it to their server, which Icecat doesn't. I don't want having to use another service like NextDNS to protect me against the application that I want to be able to trust because I'm using it for a lot of personal data.
From the mozilla website itself:
Identification:
When Firefox sends data to us, your IP address is temporarily collected as part of our server logs.
And then the data that I don't want to share with other entities:
Interaction data includes information about your interactions with Firefox such as number of open tabs and windows, number of webpages visited, number and type of installed Firefox Add-ons and session length, as well as Firefox features offered by Mozilla or our partners such as interaction with Firefox search features and search partner referrals.
Technical data includes information about your Firefox version and language, device operating system and hardware configuration, memory, basic information about crashes and errors, outcome of automated processes like updates and safebrowsing.
There's certainly a trade-off by not having Telemetry, and I prefer privacy over some "slightly better development". It is not necessary for good development.
Websites collect information, but I expect that in a public space, and also aggregating information across websites isn't so easy. However, I have higher expectations for my web browser. When something is installed on my laptop, it's like my house, and I don't want anything to access my private space without permission.
Even worse, Firefox has it implemented as Opt-Out. Telemetry by default and without asking the user isn't good practice. At the very least, they should give users a choice before enabling it. Yet, they collect everyone's IP address and other information at least once when you start up Firefox for the first time. This doesn't deserve my trust.
I don't want to play a game of 'what do I need to opt-out for privacy' with an entity that I need to trust. Why would I use Firefox if Icecat gives me the level of trust that I need. It's a personal choice.