Using Apple’s own content blocker API, the ad blocker developer shouldn’t see what you do on the internet. The new extensions are a different story.Good post Populus. I don't know if I can summarize this well but here's my attempt to ELI5:
Your ISP sees everything you do. Your browser sees what you search, watch, etc. If you want to stop your ISP from seeing what you do, you can use a VPN...but then that VPN can see everything you do. If you want to block adds, you can use an add blocker...but then that add blocker can see what you search, watch, etc.
At the end of the day, you trade your privacy for convenience. Plenty of people think it's worth the tradeoffs, plenty don't.
Just about every VPN and add blocker will tell you they aren't 'spying' on you, or 'collecting your data', or 'selling your data', etc. but most of them either do those things or can be compelled to do so by the country they are based in. The questions you have to ask your self are, "Do I think my ISP and browser companies are more trustworthy than my VPN and add blocker companies?" and "Is the tradeoff worth the convenience?"
As for what you ask, I personally prefer that only my ISP watches my traffic. I hope they cannot see my passwords, but I trust my communications company. I wouldn’t trust a VPN provider.