Kagi does that.
My guess is that if they are found to do so, then they open themselves up to lawsuits. Not collecting data isn't merely a perk - it's practically the reason Kagi exists.
If you don't have any logs you can just always say the princess is in another castle, since you can't provide data that doesn't exist.
If on the other hand you do have the requested information, you need to determine the validity of the request, and then extract the data; or refuse to comply and possibly put yourself at legal risk. For a smaller business that's probably a can of worms you'd rather avoid opening.
I understand Kagi is generally reputable, but I like the idea of a self-hosted alternative where you're in full control.