The first link goes into amazing detail on that. In short: all your information concerning location as well as current IP and some other metadata gets send to a basically unknown company with no transparency on how that data is handled.
I highly recommend reading the first, linked post though!
I use lemmy in two ways: Whitelist: show me my subscriptions and only those (subscribed) Or blacklisted: show me everything else except the things I want to never see.
The latter lead me to this thread! It’s two different experiences for me and I get a bit out of my interest bubble from time to time.