Telemetry was added to create an aggregate count of searches by category to broadly inform search feature development. These categories are based on 20 high-level content types, such as "sports,” “business,” and “travel”. This data will not be associated with specific users and will be collected using OHTTP to remove IP addresses as potentially identifying metadata. No profiling will be performed, and no data will be shared with third parties. (read more)
The Copy Without Site Tracking option can now remove parameters from nested URLs. It also includes expanded support for blocking over 300 tracking parameters from copied links, including those from major shopping websites. Keep those trackers away when sharing links!
Telemetry is important for prioritizing feature development and support for the silent majority of users that don’t disable it and then complain about ALSA support being dropped.
Why do you need search category data to develop a browser?
The update has more details
https://blog.mozilla.org/products/firefox/firefox-search-update
It’s to help improve address search bar suggestions
There are ways to prioritise feature development that don’t involve telemetry and I’d even say they are better than telemetry. For instance, surveys, user interviews, usability tests and that sort of thing.