No, a custom UPI ID won’t save you from your phone number being shared with merchants. [1] UPI payments also leak the person’s full legal name on transactions. Whether this is useful in merchant payments (not personal payments to known people) is highly doubtful.

[1]: https://scroll.in/article/1045536/are-your-upi-payments-farm...

I wanted even things like my bank name or UPI app itself to be private. So I discovered that we can creat a 9 digit UPI number/ID and use that. But doesn’t seem to help. Support for that seems to be non-existent. I have tried entering it places that ask for UPI id like online portals, but no. Only the @ format seems to be supported everywhere