As a general rule, the more unpopulated your locale is and the more niche your searches from that location are the easier it is for Microsoft to create a profile of you despite ddg's own intentions. For example, you would probably be the only Real Betis fanatic who builds their own smart home devices suffering with tongue cancer and who happens to live in <smallGermanTown>, and Microsft could establish that profile as long as ddg sends the town info to Microsoft with every separate search within some time window.

Sharing the city name with Microsoft if it’s uncorrelated with an IP address is not a privacy concern. To Microsoft, all they can see is “an anonymous ddg query about restaurants in <city>.”