No, it’s not a VPN. Your traffic does not go through it. All using it does is change which server that your device asks for IP addresses for the websites you visit. When your device asks for the IP for an ad, Adguard gives you one that points back to your device and prevents the ad from being loaded. Otherwise it acts like any other DNS-Over-HTTPS server.

The only reason telegram was unbanned in Russia is because they started collecting and handing over identifiable data about Russian users.