The main thing you're missing is that Facebook is the big corporation the GDPR was largely written to try and reign in AND that any judgement affecting Facebook is going to have downstream effects on other providers (there's been a few news sites trying the scheme in Europe too). This is gonna be the "do or die" for the pay-or-okay scheme. Given Facebook is doing it, I wouldn't put my chances on the "do" part; they
are the extreme example and EU judges don't tend to look kindly on big corporations thinking they're capable of "outsmarting" their laws.
Is right to privacy while using Facebook services a fundamental right? Well, given some of the services they own - maybe they should be. WhatsApp is massive in the EU, while Instagram seems to be the replacement for Twitter for a lot of people now that Twitter itself is flooded with fools that nobody likes to interact with. We've already had Facebook suprise drop a "EULA change" on WhatsApp users that let them use WA data in the Facebook algorithms. The specific field Facebook is even in makes it unusually hard to leave. It's somewhat socially acceptable to not have a Facebook account. Its less acceptable to not have an Instagram and I don't think you can function in west-european society without WhatsApp at the moment; basically everyone expects you to have it.
So yes, privacy when using Facebook is extremely important (GDPR literally exists to codify privacy as a right) and pay-or-okay is holding it hostage.