"Reduced Tracking" is partly the misnomer though. It's not less tracking, right?

It's just a temporary separate browsing session with history turned off.

The only thing that makes it less tracking is that it might not be associated with the profiles you're logged into in your normal browsing profile.

Assuming someone forces Google to do that in Chrome (which is pretty much the only way it would happen), how about calling it "Forgetful Mode." Because by turning it on you're telling the browser not to remember where you've been. I don't know if that would fully clear up the central misconception here, namely that in that case the only person not gathering data about your browsing is you. But at least it hints at it. When it's turned on, you're basically wandering around forgetting where you've been; hence maybe the icon should be an old man hunched over with a cane and little dots and curliques surrounding his head indicating a diffuse cognitive state!

The point has always been painfully straightforward, your browser is the one who stops tracking your browsing activity, not the sites you visit.

There's even a warning about that