I just noticed that Minecraft now has a Telemetry Data Collection section in the Options, which cannot be turned off, only set to "minimal".

This is illegal in the European Union. The GDPR forbids forced collection of personally identifiable information that is not essential to the service offered. You may ask for permission to collect it, but you may not make access conditional on that permission. The "minimal" setting includes the user ID, which is certainly PII, and so may other fields be.

It must also be opt in. You cannot enable it by default and bury the opt out in the settings.

The maximum fine that can be levied under the GDPR is 4% of annual global turnover, for which Microsoft is now potentially liable.

This requirement cannot be waived by general terms and conditions or EULAs. Facebook just lost a case about that. I see other tickets about this have been closed as "won't fix". If Microsoft's legal department is relying on similar arguments as Facebook, which seems likely, they will probably also lose that argument.

Hopefully Microsoft will allow this to be turned off. If not the next step will be a complaint to IMY.