It doesn't let pages see what you're clicking on outside of the page. That would indeed be a serious privacy violation. It merely tells the page that it's not on-screen any more. Personally I don't see any problem with that.
> The ability for a website to see when you click on things outside of the page itself (either by changing active window or tab) is quite unexpected from an end-user perspective, and its use in various "ed tech" websites to detect alleged cheating
If the "ed tech" site was detecting what you're doing 24/7, that would be a problem.
But for the 2 - 5 hour period of time that you're taking an exam and have their web page open, is it unreasonable?