The theory is that either it's better for the VPN to know what you're doing than your ISP, or you may think that your VPN doesn't keep track of what you're doing (which may be so in some situations).
I used to work at a place that separated into two businesses. One of the businesses provided Internet access. Law Enforcement used to occasionally show up and say "Can we plug this thing into your network and you let us watch some traffic?" That's probably a lot easier to do at an ISP than a VPN, but if it's on the Internet, it can be tracked.
And yes, as GregL said, it started with folks using VPN to look like they were coming from another city, area, country, so they could watch stuff that wasn't available in their local area. I used a freeVPN for that once, 10-12 years ago (watched something streamed from the BBC).
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Steve
'08 Boxster RS60 Spyder #0099/1960
- never named a car before, but this is Charlotte.
'88 targa

SOLD 2004 - gone but not forgotten