Earlier quoted context omitted.
All I see is a proxy service and a way for cloudflare to get access to the data
The proxy sees the client IP, but can't look at the encrypted DNS request. The DNS server sees (deciphers) the DNS query, but not the client IP address. It's a proxy, but with the sensible data encrypted with the server's public keys to hide it from the proxy. Cloudflare never knows who is sending the requests. How can they get access to the data?
I'm not sure I see the point,tbh. If you want to control dns, why not resolve yourself, with whatever cache you need? And if you trust a company to do that for you - assuming the two companies do log "their half" - you're just a data breach, data broker agreement or an acquisition away from a commercial entity having all the data (again)?