The Web & App activity is described a help page article [1]. There are different settings for Android, Desktop and iOS. If you follow the dialog for the Desktop version you'll see another dialog that displays:
"Include Chrome history and activity from sites, apps, and devices that use Google services"
It's not clear what's being claimed in the lawsuit, but they mention Firebase, which is an app and web site framework. I would expect those opting in or our of the Web & App activity would cover signals from Android and Chrome, but not server-side components like Firebase and Analytics. I would expect those Android and Chrome signals aren't just hidden from the user and that they actually aren't transmitted or stored. From what I have seen Google tries to be transparent with everything in the My Activity portal [3].
It's not clear what they claim is being collected via Firebase.
[1] https://support.google.com/websearch/answer/54068?co=GENIE.P...
[2] https://myactivity.google.com/activitycontrols?pli=1&authuse...