Close. The first part is fair.
A more real-life example.
I am a pharma company and I want to execute a query on some hospital data. The hospital doesn't want to give me the data in plaintext but they are fine with me getting some aggregate insights from their data that are not PII.
Now lets assume I decide to do that using FHE. I can now compute my query on the encrypted hospital data and I never see the plaintext data.
What do we "win" in this scenario? We can do this computation wherever we want because no matter where the computation is done, the data will be encrypted, so no risk for the infra provider to see that data.
What we don't "automatically win" in this scenario? 1. Guarantees that indeed I am running an SQL query on that data and not something else along with it -> That is only possible to guarantee if the FHE software is properly audited (same with any software tbh, but easier with FHE and similar techs because of the integrity guarantees due to encryption). 2. Guarantees that the SQL query I made will not leak patient data in the end (through linking additional data, or diff attacks) (same with any other SQL query)
People who are deep into these technologies will say "yes of course" thats not an FHE problem. And that is true. But every FHE vendor I've seen blur that difference by not specifying what kind of attacks they protect against when they talk about "protecting privacy".
Heck, most of them they don't even talk about the attestation process and how their clients can make sure that they can trust the software running in encrypted form. Yes, these hold true for all software, but the point (for me) of encryption in-use is to make sure we hold software to a higher trust standard than today, not just replace a trusted party with another one.