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Every server on the internet for every site you visit does this.
I guess what I'm asking is more about whether your info is sold the same way Reddit does, or is it simply retained for reporting abusive conduct
This is a desicion each Lemmy instance can make. ideally you join smaller grassroots instances that have privacy values and you won't have to worry
The website that you visit (as in your Lemmy instance) does log your IP address to fight abuse etc. Afaik it's not sent to other instances, so unless the server admin sells it somewhere (which they shouldn't but I guess you never know - that's why some folks host their own instance), it shouldn't leave the server.
Obviously that doesn't mean your IP is not logged by external services embedded in the Lemmy UI you're using - be that ads, video players, etc