The paper isn't saying games are spying on you. It's saying that if someone decided to analyse the data about someone playing then they could infer certain things.

I mean sure I guess.

I'm pretty skeptical that this is really occuring though. I mean, to what end?

As someone who runs an online game we have text logs of user actions, yes. They sit there because it's useful debugging info. A server crash happens and we look at the logs of what the user was doing at the time. An exploit is reported and we look at the logs of what the user doing the exploit did so we can fix it. Etc etc.

I really don't know what nafarious thing people imagine is really occuring.