Data theft possible with FileVault?

But I still read stories of how data leak occurs during computer repairs, and I’m not sure of the specifics of how they occur. 

The likely reason you are unable to find specific details regarding that subject is that there are none to be found. Scaremongering is pervasive and highly effective. You don't have to participate in it.

Don't divulge your Mac's password. The repair shop may ask for it, but it's not necessary to unlock the disk just to confirm their repair work.

I have a full Time Machine back up, but would still rather not have to wipe and restore if possible. 

Erasing the Mac is not necessary, but if the repair shop insists upon your FileVault password as a condition of performing the work, then erase your Mac before giving it to them, and restore the Mac from your Time Machine backup when they return it to you.

Make sure your TM backup is encrypted (obviously).

You are correct that the security of your data is only as good as your password(s) used on the Mac. Your 2018 Mac also automatically uses hardware encryption although again it still authenticates using your password. Keep in mind your Mac is just as safe during the repair as it would be if the laptop was lost or stolen.

Just make sure the laptop is completely powered off (aka a full shutdown) to be completely safe that nothing is left in memory. Usually it is when waking from sleep when encryption keys are sometimes able to be accessed through vulnerabilities.

Apple no longer asks for passwords when repairing Macs, so do not give them any passwords even to a temporary user account.