Around the same time frame as you, I began experiencing a slightly different issue with iCloud Private Relay. I can't help but feel they are related though, and I originally posted this with some changes in the iOS community area.
My global (Apple Account, in iCloud+) settings for Private Relay have always been on, with either Use country and time zone or Maintain general location for the IP Address Location.
The setting for my home LAN WiFi on my MacBook has been "Fixed." Same with my iPhone.
Usually, a Safari search or url entry yielded sites or results consistent with my Southern California location. Ads were always in English. Guesses of my location on, say homedepot.com, were in the general area as well for the IP settings above. This behavior was consistent across all three of my devices (MacBook, iPad, iPhone).
Sometime between MacOS 26.4 and now, my search and web url entry results have me in the Netherlands. apple.com has it as my location, Duck Duck Go and google.com searches return the same, and ads are in Dutch (I think). homedepot.com wouldn't even load, instead "Access Denied" and some error info displays. Some other websites won't load either, I haven't made a list yet because I think some commerce sites just block requests from areas where they don't offer service.
I use a Ubiquity Dream Machine for my gateway and I get an email after signing in, with a bit more information:
"New Sign-In
We detected a sign-in to your Ubiquiti account:
Sign-in from a new country: Netherlands. Was this you?"
Furthermore this (with the IPv6 left off by me):
"When: 2026-05-16 01:27:44 UTC+2
Location: The Netherlands
IP: xxxxxxxxxxxxxxxxx
ISP:iCloud Private Relay
Device:Safari on macOS"
To test other LAN vs WAN connections, I turned Wifi and Bluetooth off and tried my phone, using only my ATT cell data. Same behavior.
I also turned off WiFi and used an ethernet connection to my LAN. Same behavior.
Only by allowing my actual IP to be passed would things behave normally. The fact that Ubiquiti thinks my ISP is iCloud Private Relay, and that Apple uses 3rd parties to help in the IP address foolery (CloudFlare? Akami?) makes me think it's a larger problem that I'd hoped would be fixed with 26.5. Private Relay status has been green every time I look at it. I have sent feedback to the iCloud Apple Account folks; although that doesn't seem like the place for it, no other choices were even close.
Hopefully, someone at Apple is watching this thread. AppleCare was no help as they thought it was normal behavior for Private Relay.
Lastly, I am working my way through the steps suggested by John Galt. More when I finish.
Cheers