I don't see how this improves privacy. Yes, my local ISP, whose DNS I'm using, knows the domains I'm connecting with. They most likely can also access this info

I don't see how this improves privacy. Yes, my local ISP, whose DNS I'm using, knows the domains I'm connecting with. They most likely can also access this info in cleartext in other ways, if they care enough. For instance through SNI. Beyond my ISP, it's doubtful that unencrypted nature of DNS has any impact on my privacy due to heavy caching and the fact that my requests are merged together with requests from many other users. With DNS over HTTP a single third-party overseas now gets access to this list of domains I'm connecting with. It all just seems like a thinly veiled attempt at more centralization of internet services. Yes, my residential ISP and my coffee shop, library, etc. don't have these "very strong privacy agreements". But I think it's less likely they will all combine their logs to track my behavior than a single centralized entity.