Data collection isn't disabled; it will still send a small amount of data the settings page even links to more info that states, "Basic sends data that is vital to the operation of Windows. It helps keep Windows and apps secure, up to date, and running properly by letting Microsoft know the capabilities of your device, what is installed, and whether Windows is operating correctly. Basic includes basic error reporting back to Microsoft".
Second, I can turn off the ads but there shouldn't be ads in my OS.
Third, if I disable the windows update service I can't get updates without re-enabling it. That's not what my OS should require of me. Sure, I can (and do, along with router settings) but they're being too forceful.