not given a label that hides the true intent of the data gathering

I think it's pretty clear, the checkbox reads: "Allow websites to perform privacy-preserving ad measurement." There's also a link that explains what that means.

The real issue is that there should've been an advertisement that the option exists. I found it by reading release notes (I'm a nerd and am interested), but as you said, a lot of people don't read those. However, the impact here is also pretty low, since AFAIK companies aren't actually using this ATM, and generally speaking the data should stay with Mozilla. The official doc says:

A small number of sites are going to test this and provide feedback to inform our standardization plans, and help us understand if this is likely to gain traction.

I disagree that it should've been unchecked, because that completely kills the whole point of this pilot program. Perhaps it should only be there for people who have allow being part of surveys.

When a company goes behind your back, gets caught, and then tells you to trust them, do you trust them?

I don't think they've done that. I don't think there was anything malicious here, they just didn't think it was relevant to inform all users about, probably because only a handful of sites are using it.

So they haven't lost my trust. I was much more frustrated with their Pocket rollout than this, because Pocket really felt like it should've been a separate, opt-in service.

I will agree that Mozilla has made some questionable choices in the past, but this one doesn't really stand out to me. Maybe I trust them too much when they say no personalized data leaves my machine (but I have yet to see any evidence that it does).

It sells browsing and search history

But only if you use the extension. Mozilla doesn't collect that data w/o the extension being installed. If I opt-in (or not opt-out) to the PPA feature, that data will not go to that subsidiary, nor will it be associated with me in any way if it's ever provided to third parties. At least that's my understanding.

If you trust the advertiser, they can do it on their own. If you don’t trust the advertiser, why would you trust them to partner with a data slurping company?

Mozilla isn't an advertiser. Google and Brave are. So Mozilla is far more likely to limit what access to data advertisers have, so I'll trust them way more than Brave or Google.

Instead of removing it, I think Mozilla should expose some tools so ad-blockers can optionally allow privacy-respecting ads with some metadata (maybe that exists?).