When we did this at Sentry - which is also built on rrweb (we help fund rrweb btw, everyone else should too!) - we realized privacy was really hard to get right (let alone data security), so we just block all elements that are at risk by default and it turns out the experience is still pretty usable. Ben wrote a bit more about this here: https://blog.sentry.io/2023/02/16/introducing-session-replay...
Not commenting on highlight, but most of the mainstream players in this space take an opt-in protection approach, and often its "you can block this specific HTML element".. which glhf getting right