Sidewalk would collect more personal, identifiable data on pass-through commuters than governments and companies already do? Maybe, and if so it's a valid point. But I'd bet (money) not. No facial recognition would be used. Doubt they'd track you in a bus. They were well aware of privacy concerns and their data collection would be under intense scrutiny. Data wouldn't be used outside Sidewalk without consent, de-identified by default, etc. (And many of the technologies they were developing had nothing to do with data collection.)
Your first sentence is exactly what I was speaking to.
As for the rest, I'm not much of a gambler.
Alphabet's current policies on data collection are typically opt-out, so I didn't hold out much hope when I largely saw a lot of hand-waving surrounding data policies until the project was pressed by the public about it. That cost me a lot of confidence the project.
And I come from the place of following the project eagerly at the start. Even looked for jobs with them at one point.
If they wanted to do mass device fingerprinting (minimally, de-identified by default, not shared, etc.) they could do that already without a smart city so that's completely orthogonal.
There is no counter argument. It's just a fact. They don't currently operate a dragnet. Barrier for entry for setting up physical sensors in a currently functioning urban setting is high which is why they were looking to build their own neighbourhood from scratch.
Actually they were already collecting data and people easily set up outdoor sensors all the time. But maybe there'd be more incentive to collect within a smart city project.
I'm not sure if this is a serious question or a dig given the previous tones, but there are any number of ways being that the majority of Torontonians carry mobile devices. SWL was designed to be a data dragnet for the purposes of influencing urban civic design so outside of regulatory pressure one would assume they would gather every bit of data they can, including fingerprint and tracking unique devices and their movement patterns in their region.