Yes, the dialog should be made clearer and mention the permissions
granted before one clicks "Allow". This seems tracked at
https://phabricator.wikimedia.org/T91825
That said, I don't see any private information being recorded by OSM
once one clicks "Allow":
https://www.openstreetmap.org/user/new is
opened, where one can see that the form is prefilled with the email
address, and the account is created only after confirming again.
The feature was requested at
https://github.com/openstreetmap/openstreetmap-website/issues/1146
Nemo