They also could embed the whole database into iOS and activate certain hashes only for certain iCloud accounts. No one would know because the database is encrypted multiple times.
The problem with this sentence is that Apple assumes that they can't target specific individuals because every iPhone and iPad user has the exact same database in their iOS device.
But what if they have a hash in the database where they know that only one person has this exact image on their device? This way you could single out one individual with the same database.