This report worried me, but it was timely because I was literally in the process of upgrading to macOS 11.2.3.
So, while the update was downloading, I changed my firewall settings specifically to allow built-in software to receive incoming connections, but disallow downloaded signed software. I also specifically set GarageBand to block incoming connections but not other programs among those listed.
I'm happy to report that all of these settings were maintained after updating to macOS 11.2.3 exactly as-is. I wonder if the OP is referring to a different update (none that I'm aware of recently).
There is no Privacy > Advertising > Limit Ad Tracking setting on macOS 11.2.2 or 11.2.3: there's a checkbox for "Personalized Ads," which remains turned off after the update also, just as it was before.
I am still on macOS Mojave. And I also suspect that these things may vary with the applicable laws of the particular country. Indian laws regarding data protection and privacy are still in a limbo.
So, while the update was downloading, I changed my firewall settings specifically to allow built-in software to receive incoming connections, but disallow downloaded signed software. I also specifically set GarageBand to block incoming connections but not other programs among those listed.
I'm happy to report that all of these settings were maintained after updating to macOS 11.2.3 exactly as-is. I wonder if the OP is referring to a different update (none that I'm aware of recently).
There is no Privacy > Advertising > Limit Ad Tracking setting on macOS 11.2.2 or 11.2.3: there's a checkbox for "Personalized Ads," which remains turned off after the update also, just as it was before.