Rejected under 5.1.2(i) for a custom tracking prompt, but the app doesn't track. Looking for guidance

Hi all. I'm a solo developer of an iOS fitness app and I just got rejected under Guideline 5.1.2(i). I'd really appreciate some guidance, because I think I understand the rejection but I'm not sure of the right way to handle it.
Here's what App Review said:

"The app does not use App Tracking Transparency to request the user's permission before collecting data used to track them. Instead, the app displays a custom prompt that requests the user to allow tracking."

The prompt they're talking about is a sheet I show that asks "Share usage data?" and lets the person say yes or no. Nothing is sent to our analytics provider unless they say yes.

The reason I'm confused is that I don't think my app tracks anyone by Apple's definition (and a few other posts I saw online say that PostHog doesn't fall under this category). The way I read it, tracking means linking data from my app with other companies' data for targeted advertising or ad measurement, or sharing it with data brokers. My app:

  • Has no ads and no ad SDKs
  • Doesn't use the advertising identifier (IDFA)
  • Doesn't combine user data with other companies' data
  • Doesn't share data with data brokers
  • Declares no tracking in its privacy manifest and App Privacy label

The prompt is only for product analytics through PostHog, so I can see things like which screens and features get used. Those events are tied to a random account ID. They don't include workout totals, health readings or cycle data.

I asked for permission because I thought it was the right thing to do for a health and fitness app, and because Guideline 5.1.2(i) says to get permission before sharing data with third parties. It seems like the prompt may have been read as asking to track, when it's really asking for permission for analytics that aren't tracking.

My plan for the resubmission is to remove the prompt, explain that in my notes, and leave a switch
in Settings that's off by default. The downside is that almost nobody will ever turn it on, so I'd have very little data on how people use the app.

My questions:

  1. Is a custom prompt allowed when it asks permission for first-party product analytics and not tracking? Has anyone gotten one approved, and did specific wording or a note to App Review help?

  2. If the app really doesn't track, is removing the prompt and explaining that in the review notes the right way to resolve this?

  3. Would it be wrong to use the App Tracking Transparency prompt here? My understanding is that it's only for apps that actually track, and using it would wrongly suggest that mine does.

  4. Is an off-by-default switch in Settings enough permission for analytics like this? Or is there a better way to ask that App Review is comfortable with?

If anyone has been through this, or anyone from Apple can point me in the right direction, I'd really appreciate it. I want to do this the right way. Thanks!