This is a good example of anticompetitive/anti-monopoly regulation not only not protecting consumers, but in fact making things actively worse.

A better regulatory response would have been "having an advertising/analytics product and a browser product in one company is anticompetitive, split one of them into a separate business from the other, and then the browser product must not privilege the advertising/analytics product". Then the browser could, in fact, just disable third-party cookies without giving advertisers and analytics companies another alternative.

Of course they can. They just don’t want to.

In any case, this is still strictly a privacy downgrade to turn on. It's still deceptive to imply turning it on improves privacy.