"As mentioned above, Cloudflare functions as a second relay in the iCloud Private Relay system. We’re well suited to the task — Cloudflare operates one of the largest, fastest networks in the world. Our infrastructure makes sure traffic reaches every network in the world quickly and reliably, no matter where in the world a user is connecting from."
Oh they have. It's been a big problem for my company. I assume Apple must work on this from their end, but any success would seem to undermine the privacy guarantee of the service.
"Bad guys" using Private Relay is one reason these IPs get blocked: one abuser can cause an entire block of people to get flagged as a single malicious user; and a big enough group of users can also look like a single malicious user to many blocklisting strategies, because they all share the same IP.
Only because without consumers using their IPs, they're a well established company with predictable uses. Once people use it for everything, then the reputation will drop.