When Apple announced third-party keyboard support for the iPhone, the implementation annoyingly reverted to Apple's own keyboard for password or other "sensitive" entries, specifically to mitigate this problem.
It's such a simple, quality of life improvement for certain apps that I know I never want to phone home for any reason outside of 'cloud centric' features. Blocking traffic and DNS requests by hand is time-consuming, and new servers / connections can prop up at anytime without one's knowledge, not to mention you might block a domain for a specific app but need it for another (star.c10r.facebook.com for example, which also blocks Meta AI research websites).
I kind of get why they wouldn't, such as unexpected behaviour, sweet data collection and license checking, but man. At least a handful of custom ROMs and local-VPN privacy apps on Android allows for this.