As expected, Google was spying on the surfing habits of users using Incognito mode in Google Chrome. Incognito mode is typically used to watch porn (I don't know, just a guess) and is supposed to be anonymous and without logging. While it should be anonymous from Google and your local machine storage, ISP's always have your surfing information unless you use a VPN or similar solution.
On June 2nd, 2020 a lawsuit was filed for $5 Billion USD dollars accusing Google of collecting information about their users with incognito mode enabled.
(Google) “cannot continue to engage in the covert and unauthorized data collection from virtually every American with a computer or phone,”
- Lawsuit claimant
The lawsuit seeks at least $5,000 USD per user who have used Google since June 1st, 2016.
Jose Castaneda from Google mentions websites can collect information on your browsing habits every time you open incognito mode.
The case is being tried in California and is potentially subject to California wiretapping and privacy laws.
If you haven't tried Brave Browser I recommend giving it a look. It is based on Chromium and supports Google Chrome extensions but does not have Google's spying and is a lot faster and more secure.