From the new terms:
When you upload or input information through Firefox, you hereby grant us a nonexclusive, royalty-free, worldwide license to use that information to help you navigate, experience, and interact with online content as you indicate with your use of Firefox.
Honestly you already start at paragraph 1 with a wrong premise and then go down from there. Allow me to point you to the very beginning, to your first emphasis:
Here’s the trick: they are not operating Firefox, we are. It’s a system that runs locally and under our instruction on our devices. When I type something in the URL bar, or when I click Open File, or when I mouse over the screen, Mozilla doesn’t have to do anything: everyhting happens locally. No data should be being transmitted or be processed over their systems: Firefox is not a remote desktop / “live service” application.
…Unless…
And there you have it. That’s why those terms are here.
You’re not including the full relevant text. For context, let me just put the full clause here:
Notice the “including processing data as we describe in the Firefox Privacy Notice” part, which means that part just clarifies their existing ability to, for instance, collect telemetry to understand how people are using the browser, and what features are used most.
Then going forward, “as well as acting on your behalf to help you navigate the internet.” This would be any feature that relies on a Mozilla product to provide you with the ability to interact with any content on the internet. Think their Relay VPN product, any default DNS servers they apply, etc.
However, the key part was this:
This clause effectively restricts any use of the data, to that which you explicitly indicate with your use, specifically only in the context of navigating, experiencing, and interacting with online content.
In other words, the rights you grant are only granted:
This clause does not state that Mozilla gets a license to use your data whenever, for any purpose, it states they get a license to use it only when necessary, to make the browser function, specifically only as you choose to use that data when browsing. These are completely different things.