Thinking about it abstractly like "people don't want headwear displays" ignores that people don't know what smart glasses are or what they would offer them and it's difficult to convey their value without a product that can fully deliver on all the promises.
I'm not sure what degree of sophistication they have to hit for people to catch on, my hunch is it needs to use transparent lenses with at least 90 degrees FOV of display, full 6DOF tracking, eye tracking and hand tracking. Vision Pro's performance capabilities are overkill, but something with it's user experience in a pair of lightweight glasses,even if it's mostly floating virtual windows and environmental overlays with simple graphics, would be self evidently useful to anyone who would try them for a few minutes.
None of the products released thus far have hit the mark, though.
No, that's something from the bubble you're in. Most people don't care about privacy (which is not to say that I don't or that it's not important). Mass video surveillance by the state is creepy, but CCTV is everywhere. Everyone carries around a tracking device in their pocket, whenever a phone is in someone's hands it could be recording. The fears you have are already realized and people have shrugged their shoulders.
That's not to say that some changes etiquette won't develop, but think about it this way: no one asks someone else to put their phone away in private residences during conversations because it has a camera on it, but they might because they want the other person's full attention.
There has never been any significant demand for headwear displays.