It's certainly an easier option, but the privacy loss will be the same for the vast majority of people unfortunately. Unless your watch only wallet is in Bitcoin Core, or in a light wallet pointed exclusively at your own node or server (such as Sparrow pointed at your own node or Electrum pointed at your own Electrum server), then either way you are handing over your xpub to a third party who can then link all your addresses, balances, and transactions, and potentially link that against your IP, device fingerprint, and other unique data.

Given that most people don't run their own node and instead rely on someone else's node via light wallets, their watch only wallets give them zero privacy.