Quite a few banks, like Capital One, let you create one-time-use or temporary cards in their apps. So, not really shifting trust outside of the bank providing the account to begin with.
Well before the bank would only see your transfers to PayPal, rather than where you're actually spending your money. You're shifting trust in the sense that it used to be PayPal seeing where you're spending your money to your bank seeing where you're spending your money.
Yes, but my bank already has deep insight into my spending habits anyway. Eliminating PayPal reduces the number of companies surveilling me by one. That seems like a net gain to me.
And that's not even taking into account that I trust my bank more than I trust PayPal.