Which you absolutely shouldn't use, because just like Tor Browser before, a vulnerability in the browser can be immediately escalated into decloaking your real IP. Ideally the proxying doesn't even happen on the same machine.
One possible mitigation might be to run your system (or just the browser/certain apps) sandboxed to only communicate with the IP/ports mullvad uses for VPNs.
What threat model should you use Mullvad browser in? What threat model should you avoid Firefox-based browsers?
Please talk in terms of specific threats instead of fearmongering. For people wanting to avoid surveillance capitalism, which is a very common threat, I think Mullvad Browser is a fantastic choice.
For journalists targetted by nation states, perhaps it would be better to use Brave or Chrome inside of Qubes.
"Absolutely shouldn't" is silly.
- Browser vulnerabilities are non-trivial.
- Mullvad browser's proxy feature only works if you're connected at the OS level, which helps mitigate browser level exploits.
Compared to any other off the shelf solution, Mullvad browser provides a good balance of usability & privacy.
Compared to something like you're describing, I agree it's worse.