There could be a dozen other reasons besides receiving ads like personalization for better user experience, research, fraud detection but such information can always be used inappropriately when in the wrong hands like for the identify theft, tailored phishing scams and for any possible gain.

My mother owns a Xiaomi... 🥲

I am a Samsung user and haven't experienced this extreme intrusive behaviour. Although I have some other issues with the phone but the brand holds the front for me as well.