I would have to agree that to benefit most from the Android ecosystem, then Android is OS + GApps is the way to go. From a raw OS point of view though, I would exclude GApps as those apps aren't necessary to run Android on a device. I know LineageOS doesn't have them as part of ROM, and if you want to use GApps, you would install them separately. Exactly how functional the phone is without GApps I do not know, but I would presume LineageOS have their own replacement apps like contacts, dialer, calendar etc.
Sure, privacy is more than just a single feature, encryption is a small part of it. Without encryption though, you lose all privacy.
Interested to know why you say it is now broken? The DNS server will always know the domain being queried, its the transport that is encrypted. If you are using a filtered DNS server, the same applies except an NXDOMAIN will be returned. If the DNS servers are not being logged (unlike Cloudfare) then you do have a level of privacy.
AdGuard take this a step further on your device by running a local VPN. The DNS requests are processed on the device within AdGuard by blocking them based on the filters configured locally, and if they are not blocked, the requests get forwarded to the configured DNS server. There's a list of preset DNS servers (filtered and non filtered), various transport options(normal, DNSCrypt, DoT, DoH, and DoQ), but you can also use any custom DNS server including your own.
Permissions had a massive overhaul in Android 10 which allows for granular settings of permissions per app or by permission in a single place, and way more apparent. From what I recall, permissions are now requested when launching the app for the first time instead of when being installed. Location has been taken a step further by either denying, allowing, or only allow when app is running.
I think a lot of the perceptions of Android vs iOS come from years ago and is no longer valid. Since Android 9, many significant changes occurred within the OS, especially with regards to security and privacy. Somebody mentioned here that iPhone does not have a Wifi-Analyzer app due to the privacy concerns, and that is a fair comment. On the flip though, from what I recall unless it has changed, most people give their iPhone a personal name like Johns-iPhone or Janes-phone, and when enabling a hotspot on an iPhone, this is the name of the hotspot which is not so private. Its all relative to what you or I deem as a privacy concern.
Ultimately though, the average person saying I use Android for better security, or I use iPhone for better privacy I think is nonsense. People buy and use the phones they like and prefer, and that's it. And lets be honest, if a person is using social media, they probably aren't that bothered about privacy
Thanks for the discussion, I am enjoying it.