My wife, on me telling her about this, pointed the most obvious way Instagram could be using this, without storing, recording, or transmitting anything.
As you scroll your feed, they analyze your face, and use your expressions to see how you feel about a particular post. It’s like “likes” on steroids.
They already have the face detection, expression detection, etc code built into their app through the filters and those act in real time and locally. It would be super easy to redirect that towards analyzing user expressions in response to posts they may be reading at the time.