I'm not (yet) convinced that FLoC is a bad thing

I just read Malwarebytes article on FLoC. It was informative but it failed to convince me that FLoC is a bad thing.

For reference, here is the article I read:

https://blog.malwarebytes.com/cybercrime/privacy/2021/04/millions-of-chrome-users-quietly-added-to-googles-floc-pilot/

To be honest FLoC sounds like a good solution to me. My reasoning is as follows:

1. The free internet survives on targeted advertising. It would be nice for everyone to have absolute privacy, but then every website would either be behind a paywall or it would be begging every visitor for a donation, as Wikipedia does. I don't mind making a small donation to a site like Wikipedia, it's been very valuable to me over the years, but I can't afford to (and wouldn't want to) make a donation to every site that I visit.

2. Up until now third-party tracking cookies have provided the functionality of targeted advertising. But third-party tracking cookies present a very real privacy concern. The profile of your behaviour is stored online by some mostly unknown advertising company who has a list of the sites you visit, and could easily sell that list to anyone without your knowledge.

3. FLoC seems to mostly solve the above privacy problems. As I understand it, and this is key, with FLoC the list of websites you visit is collated offline, and the choice of which "cohort" you're filed under is stored offline. As I understand it, that data is not even stored in your Google account. Websites can request to know which cohort you are in, but with no other data this cannot tell them any more than which adverts to serve you, and there's no third-party ad servers profiling you.

4. People are concerned that FLoC is Google-designed, and they're concerned that it's built into the browser. All of which sounds scary until you look at the details that I've written above. It's kind of like panicking that Microsoft wrote File Explorer (previously Windows Explorer) and they built it into Windows. That doesn't mean that Microsoft can see the list of files on your hard drive.

5. All of this functionality is built into the Chromium part of Chrome, so it's function can be confirmed as it's all open source.

So in summary, absolute privacy (to the extent of invisibility) would be nice, a but totally impractical in today's commercial internet. News outlets, search engines, vendors, and other web page providers all need to cover their costs. Unless I'm very much mistaken, FLoC allows them to do so by serving targeted ads, while still providing at an acceptable level of privacy for users (much better privacy than third-party tracking cookies). But if you're still unhappy with that, there's still VPNs, Tor, or simply Firefox.

EDIT: Based on the current responses I need to point out that I'm looking for intelligent responses from people who understand all of this at least as well as I do.

I welcome to be proved wrong in my views on FLoC, but I'm just not seeing that yet