The world won't burn down, they'll just slowly and quietly lose their freedom over the course of decades. They might not even notice, since it will happen invisibly through self-censorship and implied consequences. The very idea of freedom will seem useless in their own hands and frightening in others'. Control will be centralized liberalism will give way to fear. Everything will keep moving, but the people will not be in control of their own rule.
What freedom is being lost that isn't already lost. You go to the grocery store? The mall? The ball park? City hall? Your doctors office? Your college? The package room at your apartment? The airport? The train station? The gas station?
All currently under surveillance and have been since the invention of the security camera. No one bats an eye, these are to document crimes that have occurred.
Suddenly public schools also use cameras for the same purpose, and this is where the line is drawn? Personally, I feel much more comfortable having a government that represents me and offers me a recourse in charge of security footage than some asshole who runs the gas station and does who knows what with the footage when he gets home.
The amount of freedom people are allowed is always a question of balance, not binary. If the world you described makes for a better life for the people in it, it's a better world.
In the US, we used to consider dueling to be a freedom and a proper behavior for gentlemen to engage in. We changed our minds on account of the unnecessary death. Maybe people in the future may consider "dropping off the grid" to be weird and quirky, or downright dangerous.
Maybe that's okay. We've known for millenia that unlimited freedom is more damaging on average than partially-constrained freedom. In the era of these new technologies, I don't think we're sure yet where the constraints should be.
