Telemetry (which was opt-in and not merged), crash reporting, etc. do not make software non-free. CLAs do not violate the GPL -- the FSF uses a CLA for GNU projects. So neither of these make Audacity non-FLOSS.
The privacy policy language is not binding and does not override the GPL. I think including it was a mistake and that it should be removed, solving the problem. Plenty of proprietary software (Windows, etc.) has crash reporting and telemetry and doesn't have a blanket "no kids allowed" policy, and Microsoft has better lawyers than Muse Group.
It would certainly be a good idea for Audacity to, by policy, enforce that any kind of crash reporting, auto-updating, analytics, etc. is opt-in. Perhaps the existence of a fork will push them to do this.