Tradeoff is that it seems to be a browser only thing. Some tools like the default macOS curl seem to be integrated with it.
Quite frankly, it's a bit silly to paint Apple as some privacy fortress, who wouldn't have to comply with law enforcement/intelligence to unmask/tap traffic. I mean, for a lot of people VPN choice is done considering legal jurisdictions somewhere far away. Apple could/would never possibly offer this level of protection.
There were also plenty of corp-ware in existence that had Flash as *absolutely mandatory*.
If 20% of people are using VPNs, blocking them is going to be a double-digit hit.
Traffic is sent through two independent relays: Apple sees your IP but not the destination, while a 3rd party egress partner sees the destination but not your IP, with encryption preventing either side from correlating both ends. It's some of the benefits of Tor. But of course you still need to put a lot of faith in Apple's implementation, which is the hardest part.
It's a very limited VPN as it only works for Safari/Mail and only anonymizes you to your region/country.
This shit has been going on for maybe 5 years but no one seems to know or care.