VPNs shift trust from your ISP to the VPN provider.

I trust Mullvad 100x more than my ISP, so it's a good decision to use Mullvad and it benefits my privacy.

It's not like your ISP or Mullvad can see content of sites, either they can just see the DNS requests.

What ISP sees without a VPN: news.YCombinator.com, apple.com, Wikipedia.com

What ISP sees with a VPN: Mullvad server

What VPN sees when you use it: news.YCombinator.com, apple.com, Wikipedia.com

You also need to trust the root certificates that they don't give key access to the VPN or ISP

Note that depending on how you're using your VPN you need to explicitly set it for DNS queries to be made over the VPN