

I have an XZ1 Compact myself and was using it as my primary phone with LineageOS (+microG) and later iodéOS until 3G was shutdown in Australia. Nowadays I use it as a portable music player, although I don’t listen to music away from my desktop that often so it doesn’t see much use. It sounds fine to me, certainly good enough for the overwhelming majority of people I would say.
I can’t really tell you whether it’s a good idea to buy one for this specific purpose, that’s quite a subjective question. It is very easy to install custom ROMs on that phone, though, and those that exist are well maintained. Some of the answers here are overcomplicating or fearmongering; installing custom ROMs is just about reading carefully and following basic instructions. The overwhelming majority of issues people run into come from impatience/inability to read. Bricking the phone is not a realistic possibility unless you are braindead.
Here is a comparison of all the various privacy ROMs (and “stock” Android), last updated on June 9 this year.
The person in that other thread who said “iodéOS is a carbon copy of LineageOS” is incorrect. iodéOS comes with a suite of FOSS apps (picked by the community) as optional installs, which is designed to make the transition easier for someone who is brand new to deGoogled Android (similar philosophy to CalyxOS). iodéOS also removes more of the Google services left in LineageOS, such as those associated with the Trust feature, and replaces them with more private alternatives. Additionally, iodéOS has developed a GSI version alongside its officially supported custom device ROMs, which means you can theoretically install and run iodéOS on any currently unsupported device that supports Project Treble.