Exactly right. The tech Apple uses can be one of two things:
1. It requires a perfect 1:1 match (their documentation says this is not the case);
2. Or it has some freedom in detecting a match, probably including a match with a certain percentage.
If it's the former, it's completely useless. A watermark or a randomly chosen pixel with a slightly different hue and the hash would be completely different.
So, it's not #1. It's going to be #2. And that's where it becomes dangerous. The government of the USA is going to look for child predators. The government of Saudi Arabia is going to track down known memes shared by atheists, and they will be put to death; heresy is a capital offence over there. And China will probably do their best to track down Uyghurs so they can make the process of elimination even easier.
It's not like Apple hasn't given in to dictatorships in the past. This tech is absolutely going to kill people.