Having the actual user pay is a necessary but not sufficient condition for a user centered product or service. It doesn’t guarantee the company won’t double dip but without a direct economic model nothing is even possible but ads and surveillance.
The agreement could be carefully written by a skilled lawyer to define the things Kagi cannot do, the proof customers must present in order to proceed with a valid lawsuit, and even the maximum damages that the customer may sue for.
In that case, if Kagi was found at some point to be using customer data for these purposes, it could be sued very easily and by many parties.
People are calling for regulation for data privacy. In the meantime, Kagi can create its own regulation it will hold itself to for the benefit of its users, can it not?