What is "data collection"?

The Data Disclosure, Collection and Management policy for add-ons states:

Add-ons must limit data collection to what is necessary for functionality and use the data only for the purpose for which it was originally collected. Data includes all information the add-on collects, regardless of the manner.

It defines “data” but it doesn’t define “collection”.
We are drafting up a privacy policy for our extension. The privacy policy needs to state all the kinds of data that are collected.

Does “data collection” mean “data that your add-on accesses and inspects” or “data that leaves the users’ device”?

In the #addon-reviewers:mozilla.org Matrix chatroom, @anagekar:mozilla.org said

It is data that leaves the users’ browsers (and sent to any first and third parties internet services and native applications).