on the other hand, it would be illegal to scrape masto data and use it to profile people for ads. If that geta reported, it could be sued hard

@nutomic wouldn't it help to turn your profile private?
For example, on Friendica you can check the option below and you cannot access any information of that profile besides the bio, your official website and your contact info (Matrix or XMPP):

I imagine that by having people interacting with your content from P29, your content gets sent over to them, so, in turn, Meta can sell that info to advertisers or allow them to target you otherwise.

Or, more likely, they could use info they receive from the Fediverse to further track their users on the platform (say A from P29 likes my image of a giraffe on my profile. Now Meta will have that information available to advertisers, and they can advertise X with cheap plane tickets to Africa or something).

Edit: Now that I think about it, they could also still be doing some sort of EEE-thingie that they did with XMPP