So, yes, average Internet user isn't very familiar with DNS. Maybe privacy wars will lead to growing awareness in this area though.
But.
(1) There is no informed consent happening here, highlighting to a user, say in Europe, that this would lead to a U.S.-regulated entity knowing a lot about their browsing history. Regular users can't be expected to understand that that is what this setting implies but will think of "DNS over HTTPS" as technical mumbo jumbo that they don't need to pay attention to and that they should keep at default.
(2) The dropdown doesn't have any options besides Cloudflare. In order to use the "Other" option, the user would have to research URLs of providers on the Web, which seems like so much friction that few people will do this.
They do NOT want the list to go:
Cloudflare
Sketchy Valley Company with six months runway and no clear plan how to make a profit
The Actual Mob, really
Great Britain's Ministry of Truth
Russian Media Company owned by Vladimir Putin
And then have news sites going "Why are all these obviously untrustworthy folks listed?" when the answer would be "Oh we heard that people didn't like the short list of actually trustworthy providers so we added all the other ones that we don't trust too!"
I also don't believe that Mozilla has the ability to greatly influence the way Cloudflare would run their service, given that they're probably not paying a lot (or anything at all; don't know the particulars), and are unlikely to be a major component of Cloudflare's revenue. Cloudflare has much more to lose by picking a fight with the U.S. government (think government surveillance) or by pissing off major advertising networks and media corporations (think surveillance capitalism) who make up the lion's share of their revenue on Cloudflare's core webcaching business.
