In the late 90's with dial-up connections, most ISPs would not do this, hence the search for .su proxies. Today, it is much easier when you can spin up a VM in the cloud and control DNS entries.
Back in the late 90's and early 2000's, there were a set of hacking challenges called the Zebulun Challenges hosted by the site CyberArmy. For the 7th or 8th challenge (Lt. Kernel to Kernel), you had to find a proxy or have an rDNS for your IP that resolved to a .su domain in order to proceed into the simulated system you were trying to hack into.
Maybe I'm cynical, but this looks more like a data hording scheme than a protect my privacy enhancement. If I use Google to sign in, Google and the app has that data and can monetize it.
Now if I sign in using Apple, they are going to have the data to monetize. They may keep the app from getting my information, but that means that their data is better than someone else's data, so it is more valuable. Also, they are getting app usage statistics that I may have opted out of at the OS level, but they now have due to having the sign in history.