Zero telemetry is tricky. I do not believe there is much to Minecraft telemetry outside of plugins/mods sending semi-anonymous usage pings out every once in a while (which can generally be disabled per-plugin)

In terms of open source servers, that’s also complicated. Both Fabric and Paper are developed open-source, but both rely on a bit of a technical legal loophole. Rather than distribute proprietary Minecraft assets, they download the Minecraft server from Mojang on first run and modify it using their open source code.

IDK how familiar you are with the Minecraft plugin/mod scene, but both Paper and Fabric are great but different.

Paper is leaner by default, but only supports server-side plugins, which have limits but mean that just about anyone can hop straight into a paper server without having to spend hours configuring clients. Generally paper servers have a more “vanilla” vibe with options for QOL improvements.

Fabric mods can run on the server, the client, or both, depending on what is being done. Generally, visual updates are client side, optimizations/QOL fixes are server side, and new assets need to be run on both, but there’s a lot of exceptions to those generalizations. With Fabric you can turn Minecraft into something completely different if you want. The downside is if someone does not have the right mods installed they likely can’t join your server.