I've been using this pattern for years.
I have a custom domain just for signups, and I sign up with [service].[username]@customdomain. The domain simply has a catchall email "accounts@customdomain"
Combined with a password manager (Bitwarden) this is absolutely brilliant.
* Spam: if I get any spam, I know exactly which company is responsible, whether directly, through selling user data or because of breaches. And I can simply block the whole alias.
* Multiple accounts: If you need a second account with some service, you simply use a new alias. No need to worry about secondary emails just for a few accounts.
* Mitigate data leaks: if some database gets compromised, all they get is a throwaway email. They also can't try to log in to other accounts or do password resets if they get a hold of the password. (somewhat redundant with a password manager and unique passwords, but still)
* Privacy: all those ad data aggregators have a harder time connecting me between accounts. (of course they still use names, address, credit card info, etc; but it helps)
* Easy self-hosting: email hosting can be a pain. But in this case you only need to receive, never send. And receiving basically always works, even with the most broken email server setup.
A downside is the unique domain name. I always wanted a shared domain with lots of users to further reduce exposure.
I actually thought about starting a service that provides this, but it's a niche product with non-trivial technical hurdles and potentially lots of support demands, so I'm happy that Mozilla is offering this.
The only downside is that people get really confused when they have to deal with your email, for example when calling support. But it's never been a real issue.
Highly recommended!