I would call what you are describing as anonymity as opposed to privacy. And you are right that if you want anonymity mixing in with the crowd can be helpful (though there are still techniques for fingerprinting people in other ways).
Having your traffic exit from other parts of the world from an endpoint you control can be helpful for all sorts of things beyond privacy and anonymity.
Wireguard encrypts all of the traffic. That is definitely added privacy in my book. And, mixing your data with others on someone else's server is not very appealing. Not only would you get throttled because of other traffic, but you would need some serious trust with the owner of the server.
Cute, but that doesn't give you any added privacy, so why bother?
The value of VPNs is having your data mixed in with other users data, and being hidden in the noise.
I would call what you are describing as anonymity as opposed to privacy. And you are right that if you want anonymity mixing in with the crowd can be helpful (though there are still techniques for fingerprinting people in other ways).
Having your traffic exit from other parts of the world from an endpoint you control can be helpful for all sorts of things beyond privacy and anonymity.
Wireguard encrypts all of the traffic. That is definitely added privacy in my book. And, mixing your data with others on someone else's server is not very appealing. Not only would you get throttled because of other traffic, but you would need some serious trust with the owner of the server.