you might read NetEase’s privacy policyhere.
The primary bone of contention is the bit directly under “Personal Information we receive from you”.
There’s a lot more in the doc.

If you’re uneasy about the game, I encourage you to go through it in full.
Now, here’s Starry Studio’spost on Steamin response to the privacy concerns.
“Once Human takes our users' data privacy very seriously,” it reads.
We appreciate and welcome any and all feedback given by our players to help us improve."
“We sincerely apologize for any confusion or uncertainty experienced by our players,” it goes on.
“The general internet has warped this into a demanded requirement and a privacy issue,” Hall wrote.
“It’s not.
These are only sent to the company when required by applicable local laws.
This is why it says ‘Receive from you’ and ‘as required by applicable laws’.
In some countries government issued ID’s are required for live service game access.