I'd say when the data is observed is when it becomes surveillance. If Apple collects this data encrypts in cloud storage and only does analysis on device. Do you still see this as surveillance?
Once the data is collected, BigTech can change their privacy policy or Terms of Services to access this data any time. (And that is exactly what they have been doing). Moreover, they still need to collect some data to ensure the "on device" analysis is working as intended. (That's where the clause "we may also collect data to improve our services" comes into picture).
If I recall correctly, that was exactly the US government's defense after the 2013 Snowden leaks revealed it was tapping every internet connection possible and sucking in every piece of data available.