It’s not the OS that’s collecting that data. It’s the apps and online services you use. Remember, if something is free, it’s likely that you’re the product.

In the case of threads, it’s owned by Meta, so if you have a facebook or instagram account, then you have willingly agreed to letting them collect, store and use all your data.

Edit: Oh, I think I understand your question now. You’re refering to the apps privacy terms, right? Well, it has access to monitor all activity on your phone. As default, your phones OS allows this, but you can disable it for each app installed. But this will probably result in the app not working right.

From what I know having worked in adtech,

• they collect as much information as they can from the device such as location from GPS, interests from follows, likes dwell time on posts, and other information you knowingly or unknowingly provide. This includes scraping information from photos and videos you upload to the app. Eg, you upload a picture of an expensive bag with the caption “my new bag” - the bag brand can be determined and assessed algorithmically.
• the above extends to websites you visit with in-app browsers and the actions you take while on those pages
• deduce what they can’t eg where you live & work based where you spend time during the day vs night,your real life interests based on places you visit eg gym, fast food places, church etc. Also they apply complex algorithms to relatively accurately deduce anything you don’t directly provide. Eg if you disable accurate location, they can figure it out based on the ip address(es) you connect to the app from (geolocation algorithms) .
• and what they can’t deduce is bought from third parties. Those are companies normal people don’t know exist whose sole purpose is scraping and categorising information - sort of similar to credit agencies but different. In this case, they take what they know about you and send it to this third party which then returns eveything they have that’s related. Eg the app (threads) might send your email and username and get a response containing your previous home address (say scraped from some insecure government website)

With the above, even without knowing your name (this can easily be determined) , they are able to know enough about you to determine the kind of person you are, with whom you interact, where you go, your political affiliations, job, salary estimate etc and sell it to advertisers. This is usually sold as “audiences” but given the tools provided to advertisers, it’s easy to create hyper targeted ads and recommendations (remember Cambridge Analytica).

We voluntarily give up a lot more information than we realise.

And remember, the smartest people on the planet work at these companies, so the above is nothing in comparison to what behemoths like Facebook, Google, Tencent, etc are capable of.