Please explain to me how that works. If I download gguf file and run inference with it, how is it collecting and sending data back to China?

This makes no sense, 99% of the people using Chinese models are using them via Western inference providers who are running them and serving them to people over openrouter or whatever. If anyone is stealing your data it would be an American or European inference provider. A model has no ability to send data anywhere.

China bad by default, right?

> unless run locally or self-hosted

You will see soon that china uses illegal uyghur children labor to train these models so we should all boycott them