Telemetry is all about how it’s presented to the user. It should simply be presented at install/first start and users should be shown the checkbox (it shouldn’t be hidden away in settings) and asked nicely to leave it on in order to improve the product. Checked by default is a hot topic but I think it is OK so long as it’s presented clearly to the user.
I mean obviously I wouldn’t like any of the information I handle to be sent somewhere, but I also don’t mind statistics about that info (number of files, file sizes, feature use count) to be sent to Microsoft. If I found out that file contents was transmitted then obviously I’d be outraged - but I’m rational and assume Microsoft is too.