You did not address the "monitoring" aspect of my question.
AFAIK, you need some or all CC components to provide updates of the software and send crash logs directly to Adobe.
This isn't anything new! We've see the same behavior with Photoshop CS6 and earlier products from Adobe (and I suspect others).
If I am using LR on my computer AND connected to the internet is Adobe monitoring my computer as reported by people using network monitoring tools?
I have no idea, it's not something I'm concerned about. Should be easy to detect if this is happening or not. I don't have the CC menu item/app running all the time, it's not necessary for me but again, whether Adobe is monitoring or not isn't on my radar.
The problem is that as you say you MUST be signed into CC to use LR.
That isn't at all my experience! I've used CC without a lick of net access.
If you sign out it is deactivated.
Seems pointless, one deactivates so one can run on another system just like Photoshop CS6 and even earlier versions. You can run two copies per serial number. But you can install on as many systems as you wish. You have to deactivate one to activate a third.
People have posted network monitoring logs of LR constantly communicating with Adobe servers.
Again, that appears to be impossible if you computer isn't logged onto the net and as I've said, I've been able to run LRCC, CS5, Photoshop CC without any such net access.
This reported continual monitoring of your computer usage by LR would effectively constitute a security hazard apart from a privacy infringement.
Being connected to the net, Adobe not withstanding, that would be true as well. So what? If you have such a fear, don't connect to the net. Do it once every 99 days if you're a CC subscriber and if you need to deactivate your copy of an Adobe product. BFD.