I'm really curious how a dusting attack actually benefits the dusting party. How does it invade privacy more than simply monitoring the target UTXO?
Attackers dust addresses that have previously spent a utxo, not ones that currently control a utxo. So, now there is a new utxo at that address, and when the wallet goes to spend it will use the new dust utxo along with utxos at other addresses the wallet controls. Now this new spend tx reveals on chain that the previously used address is connected to other addresses.