Yes, I agree that your phone has the ability to find stuff like this based on ML etc. However, if their algorithm finds something that matches a hash of child porn, you'll be reported (after notification or something, can't remember).
Can you imagine what that would do to people? The risk of fucking this up and destroying someone's life is far too high. It's a stigma that will never go away even if it's proven false.
And what if the government decides that they want to ruin a political adversary? The technology is there to report them, rightly or wrongly, for child porn on their phone and ruin them. Again, proving that it was false will not be enough if it leaked out in the first place.
In my opinion, it's my phone (yes, yes, I know they all dial home to the mothership, I only lease it etc.) and I should have complete say over it and this is one more step away from that goal.
It's on the dystopian highway imo.