Because for most people to get any utility out of it, they need to plug in a smart device.
It doesn't matter whether you run android TV from the TV itself or an external device.
All the popular streaming services throttle or block open devices.
There's no regulation on it, because regulators want locked-down hardware that can only take actions approved by them.
Why in this world of yours is the only option Android TV?
Even with that, there are plenty of safer distros, or you can even get a cheap mini pc and throw one of the many awesome Linux distros on that have zero tracking and are far more capable/performant.
>All the popular streaming services throttle or block open devices.
This just isn't true. Have never encountered this.
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I find Apple TV to be a decent compromise.