I would guess its not supposed to be off by default this lawsuit just got more interesting. The rest of what you said ill have to try but it makes not sense at all.
I think it respects some older setting, but I'm not sure. It was off by default for me from the beginning, and I don't know for certain what the intended behavior is. Apple has some refining to do with App Tracking Transparency, specific to that toggle. Some apps will ask before they show the system prompt and if you say no to that, it won't trigger the ask not to track prompt at all, which means it won't show up in the list.
It's meant to track the apps you've allowed, not the ones you've declined, which is why you need to redownload apps for them to show up after you've enabled the setting. I don't know why it works that way, but it's certainly confusing.