The supposition was that, if the scanning had no reporting capability, then Apple could still claim a lack of capability. They could respond to government demands with, "Sorry, our software only blocks uploads. We have no ability to get telemetry on what uploads are blocked or how often."

That proposal probably wouldn't work for a lot of reasons though. The largest blocker being that (IIUC) the NCMEC won't share a DB of offending signatures without NDA, so Apple probably can't load it onto consumer devices.