Apple has never truly backed away from anything, we simply “don’t understand” this new feature. As many here noted, Apple will retreat and then when the furor has died down, slowly bring this in a surprise update.
Hell, nothing about this feature was business as usual.
I think this will play out more like the butterfly keyboard debacle. They won’t ever really acknowledge how bad the original thing was, but they’ll return to a solution the community finds palatable (server side scanning), and wrap it up in a bow like they did with the “magic keyboard, now on our laptops”.