For the known top trackers, it's to have more control over nefarious users such as duped accounts, banned users and potential law enforcement trying to sign up. Sure it's not a bulletproof solution to deal with bad actors but it's still an effective way. You gotta remember that these trackers are free (yet private). The admins/operators don't get paid, so last thing they want to do is waste time dealing with such users.

At the end of the day you still have to trust them with your real IP, but it's mostly to protect themselves afaik. I obviously can't speak for every tracker out there.

I was/am in the same boat, but I quickly gave up for the following reason: Why bust my ass trying to give my business? If Lowes blocks me then f*ck em I'll take my business to Home Depot. It's their loss.

Can't really answer, but if the library was available to all your Plex users, Tidal probably has countermeasures for that or maybe would ban your account.

Seeing 10 different songs (assuming you had 10 users streaming at the same time) being pulled from their servers from a single account would definitely raise suspicions.

Maybe you can get away with it if you have a Family type account with Tidal.

If there are only 2-3 of you, maybe it's worth a try though.