It does but my point is that your settings are applied to all activities.

Here's a few examples that might help demonstrate my point:

I used to do parkrun regularly. I had no problem sharing my Strava activities for parkrun because me doing it wasn't a secret, nor was the location secret, nor was my time secret. All of these things could be found from the parkrun website once the results had come up. John Doe was at this location at 9am and ran this route with 400 others in a time of 26 minutes or whatever.

I was also part of a cycling club that did a regular "club run" on a Sunday. 5-15 of us all doing the same route. It was good for club morale for us all to upload our rides to help show how popular it was and encourage other club members to come along. They could see that we weren't going at a silly pace and that we stopped regularly to regroup as we had riders of all abilities and speeds riding with us.

But then I also helped out with my kids running club at school, taking a bunch of 7-11 year old's on a 20 minute jog/run (depending on how quick they were) around the local area. This absolutely should not appear on Strava (public or not). The running club wasn't a secret (everyone at the school knew since they had the option of letting their kid do it) but that's a whole world of difference from having it public on Strava showing the usual start time, the various routes we used to take, where we stopped, etc. Privacy zones can help hide the start/end but that wouldn't help hide everything.

We just made sure that all of the parents who helped out knew that we shouldn't even record it with their smartwatch. I just used to create a manual entry of "Morning run" with approximate distance and time. That was good enough for my training stats.

There's no one privacy setting that handles all of this. Whatever setting you use relies on me to manually adjust the activities that don't fit that setting. The problem is that humans are fallible, so remembering to make it private or hide the location data isn't entirely reliable. You're also at the mercy of Strava (or whatever) not doing something stupid and accidentally making private data visible due to some bug, glitch or leak.