Why is Spain A good example of how most conquered peoples of other faiths were treated under the umayyads caliphate

That is because Spain had both Christians and Jewish people besides Muslims in the country. The people had all religious rights and were allowed to be of different religion as long as they accepted that the Muslims rule and don't challenge political rule. In exchange they were allowed to uphold their traditions, have their courts, live life in whatever way they want to religiously.