Actually, I remembered that IAP technically usually use no Apple Pay, and regular credit card information saved with the Apple Account instead. Apple did add an Apple Pay option for Apple Account payments more recently, to my knowledge only as a supplementary method for certain transactions, while mandating regular credit card payments for others. I summary, using IAP purchases, depending on the payment methods tied to an Apple Account, usually use direct card transactions and no Apple Pay, likely making your issue an Apple Account payments privacy issue.

I had a conversion with an LLM about this. The payment was an Apple Pay not IAP or card transaction. The model confirmed that Apple will never submit information not present in the Apple Pay sheet. I confirmed the purchase did not request phone field. The model suggest that the merchant got the data from "Third party identity verification and fraud detection". So, Apple Pay was not the issue.