Hasn’t Google been parsing Google Photos images, email content, and pretty much everything else since forever? Do you just stay off of smartphones and cloud platforms entirely?
They don't (publicly announce that they) scan things on my device.
They could have just had a local failure. I suspect there were a lot of arguments around this point - should they be making an attempt merely to prevent such content from their servers, or to detect/report behaviors which may be illegal and harmful.
Yet.
Before it was "only content uploaded to iCloud is scanned" and now it's "photos are scanned on-device". That's frog boiling that tomorrow easily becomes "arbitrary files are scanned anywhere on the device".