Using a public VPN anonymizes your traffic if you assume many other people are using the same VPN server. A MITM can easily see you're using the VPN but not easily what websites you're accessing. If the VPN provider is truthful about not keeping logs, it's hard to prove that you visited a particular website and not someone else using the VPN. A DO droplet does not provide the same thing. You can visit a website, the website can store your IP for months or years, then LE can subpoena DO for the person with that IP at a given time. Plus setting up a DO droplet VPN sounds like a PITA.

As for why to trust Mullvad in particular, you can't trust them completely but they list all their employees and their ownership structure publicly, they have a good track record, they have documentation which seems like it's written by people who know about security and their customers' potential threat models, and they don't have a suspiciously large advertising budget.

However, I wouldn't trust any VPN if you have to withstand targeted scrutiny from governments.