I would just apply Hanlon's razor here. It most likely was a bug or oversight, if it had been some malicious evil scheme, I would assume more care would have been taken so that people don't find out.

Now, coming to the question of why do they even store it for opted in users?

Aside from potential ad relevance, I think it is simply because they power a lot of their features with context and they get better with data.

For example, if you search cheesecake on Google, the answer likely will be either a recipe or a restaurant. A restaurant search will likely be helped by data about previous visits and current location. A recipe search will be helped by past search result clicks and again location.

Do they really need to store this to serve search results? I don't think so. DDG works without them, but then again DDG performs very poor for queries like this which can be helped with context.

Note: I don't know how any of this exactly works, so these are just my assumptions.