Apple now has the ability to encrypt the images before sending them to icloud, with a private key you own. Except that some percentage of images that match the CSAM fingerprint with their neural feature extractor will be sent to a CSAM filter on the server side (whose workings we don't have many details about)
This whole thing backfired on Apple entirely due to psychological effects, not because they are really doing anything more "panopticon" that they would already able to do now on their icloud storage (after all people are ready sending their photos to apple)